PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

MIDDLESEX COUNTY COUNCIL BILL

As amended, considered.

Ordered, "That Standing Orders 240 and 262 be suspended."—[The Chairman of Ways and Means.]

Motion made, "That the Bill be now read the Third time."—[King's Consent Signified.]

Question put, and agreed to.

Bill accordingly read the Third time, and passed.

LONDON MIDLAND AND SCOTTISH RAILWAY BILL [Lords] [By Order]

Second Reading deferred till Thursday next.

LONDON MIDLAND AND SCOTTISH RAILWAY (CANALS) BILL [Lords] [By Order]

Second Reading deferred till Thursday next.

OFFICER PRISONERS OF WAR, GERMANY (SHOOTING)

The Secretary of State for Foreign Affairs (Mr. Eden): I am now in a position, with the leave of the House, to make a statement about the deaths of a number of Air Force officers who were prisoners of war at Stalag Luft III. Before dealing with the facts I wish to state that His Majesty's Government have no knowledge of any mass shooting of British prisoners of war, other than that which has already been reported in connection with Stalag Luft III. I make this statement in order to allay fears aroused by rumours which have received wide circulation recently.
In my previous statement, I told the House that 47 British and Allied Air Force officers had been shot as a result

of an escape from this camp. This information was based on the figures given to the Protecting Power by the German authorities on a routine visit to the camp. We have now received an official communication on the matter from the German Government. This communication states that 5o officers have been shot and not 47 as previously stated. The next of kin of the three additional victims have been informed.
The German note gives the same explanation and attempted justification of these shootings as was given to the Swiss inspector on 17th April, namely that these officers were shot while offering resistance when found after their escape or while attempting a renewed escape after capture. The note adds that, during the month of March, there were a number of mass escapes of prisoners of war from camps throughout Germany, involving several thousand persons; that these escapes were systematically prepared partly by the General Staffs of the Allies; and that they had both political and military objectives. This situation is stated to have endangered public security in Germany. In order to repress these undertakings, specially severe orders were given to pursue, at all costs, all prisoners who failed to halt upon challenge, or offered resistance or made renewed attempts to escape after capture, and to make use of weapons until the prisoners had been deprived of all possibility of resistance or further escape. The note states that all prisoners who escaped in March, except for about a hundred, the search for whom is continuing, were recaptured but that weapons had to be used against some of the rest including 50 from Stalag Luft III. It is also stated that the ashes of 28 of the 50 officers reported to have been shot have been taken to the camp.
I now propose to inform the House of the facts as we have learned them from statements on oath made by officers who were in the camp at the time of the escape and have been recently repatriated. They include Group Captain H. M. Massey who was the senior officer for the whole camp and acted as prisoners' representative. The information they give is as follows:
Early in this year a tunnel which had been excavated by the prisoners of war was ready and the escape was made on the night of 24–25th March. Some 76


prisoners of war got out of the tunnel during the night, but four who were following them were detected and arrested at the mouth of the tunnel. These four were immediately removed to camp cells. I do not propose to give full details of the plans of escape, but it is now known that these prisoners intended to make their way, in pairs, by different routes to different destinations. During the day following the escape, the Gestapo arrived and took control of the camp. On 6th April Group Captain Massey was informed by the Commandant that he had been ordered by the German High Command to give him some information about the escape. He then read out a statement to the following effect—this is the German Commandant:
With reference to the recent escape from the North Compound at Stalag Luft III, Sagan, I am commanded by the German High Command to state that 41 of the escapers were shot while resisting re-arrest or in their endeavours to escape again after having been rearrested.
On being pressed for further information regarding the circumstances, and whether all the men were shot dead, or some only wounded, the Commandant merely repeated the statement and said that he could not amplify it except that all were killed, and there were no wounded. A similar statement with the substitution of the figure 47 for the figure 41 was subsequently posted up on 8th May at the camp at Annaburg, to which Group Captain Massey and the other repatriates from Stalag Luft III were removed on nth April in their journey home. With the exception of one shot fired at the last of the 76 as he got out of the tunnel, no shooting was heard by anyone in the camp at the time of the escape. After the news of the shooting had been given to Group Captain Massey the whole camp went into mourning. The Germans at that time refused to allow the bodies of those who had been shot to be brought back to the camp, for burial in the camp cemetery.
So much for what happened in the camp. The information which the repatriated officers have given goes further. Within a few days of the escape some of the officers were brought back to the camp under heavy guard, and were put into the camp cells. According to the report of the Protecting Power

they are still in the camp. They reported that, after capture, they had been taken over by the Gestapo who had removed them to a Gestapo prison at Görlitz, some 40 miles away. On the way there, cars with armed Gestapo both preceded and followed the vehicle in which they were driven. At Görlitz they were put into cells containing five or six each. They were all interrogated by the Gestapo and in the meantime were kept in shocking conditions with very little food. Amongst other threats the Gestapo used the following words to them:
We have got you here. Nobody knows you are here. To all intents and purposes you are civilians. You are wearing civilian clothes and we can do what we like with you. You can disappear.
Others were told that anyone dressed in civilian clothes would be without the protection of the Convention. After their interrogation they were taken back to the cells and some German officials came in and picked out a number of men. Those picked out were seen from the prison being driven away handcuffed and in the charge of the Gestapo officials who were armed with tommy guns, whilst the remainder were handed over to the Luftwaffe and brought back to the camp. Those shot included all the officers of European Allied nationality who were recaptured. These were taken away on different days in small parties with one larger party of about 20. On 6th April, the very day on which the Commandant of the camp informed Group Captain Massey that the number shot was 41, a party of eight, six of whom were later shot, were taken away. The number given to the Swiss Inspector on 17th April was 47.
The German note states that a final communication giving further details will be forthcoming but His Majesty's Government feel obliged to declare at once that the explanation now put forward by the German Government is in fact the confession of an odious crime against the laws and conventions of war.
I would draw the attention of the House to the following facts:
First, no orders have at any time been given to British prisoners of war to take part, in the event of their escape, in any subversive action as is alleged in the German note.
Secondly, all these officers knew the futility of attempting any resistance if they were recaptured.
Thirdly, as to the possibility of a renewed attempt to escape we now know that owing to physical exhaustion and ill-treatment at Görlitz they were incapable of any such attempt.
Fourthly, whether these officers escaped in small or large numbers there can be no justification for the German authorities executing them. We know, however, that during the original escape the officers were in pairs and that when last seen after leaving Görlitz prison they were in comparatively small numbers handcuffed and under heavy guard.
Fifthly, and most significant, there were no wounded as would have been inevitable if the shootings had taken place during an attempt to resist capture.
Sixthly, the German statement omits all reference to Görlitz, and contains no account of the circumstances which led to the death of any single officer.
Finally, the ashes of 28 of the escaped prisoners have now been returned to Stalag Luft III although the Germans had previously refused to send back the bodies for burial. This is the only occasion known to His Majesty's Government, or the Protecting Power, upon which any British prisoner of war who has died during captivity has been cremated. It is abundantly clear that none of these officers met their death in the course of making their escape from Stalag Luft III or while resisting capture. The Gestapo's contention that the wearing of civilian clothes by an escaping prisoner of war deprives him of the protection of the Prisoners of War Convention is entirely without foundation in International Law and practice. From these facts there is, in His Majesty's Government's view, only one possible conclusion. These prisoners of war were murdered at some undefined place or places after their removal from the Gestapo prison at Görlitz, at some date or dates unknown.
His Majesty's Government must, therefore, record their solemn protest against these cold-blooded acts of butchery. They will never cease in their efforts to collect the evidence to identify all those responsible. They are firmly resolved that these foul criminals shall be tracked down to the last man wherever they may take refuge. When the war is over they will be brought to exemplary justice.

Mr. J. J. Lawson: I am sure that the House is shocked, as the country and the whole civilised world will be, at this atrocity committed upon helpless and gallant men, and I am sure that the Government can take it, that any steps they take now, and in the future, to mete out justice to these culprits and murderers, will be supported by the public of this country.

Hon. Members: Hear, hear.

AIR RAIDS (FLYING BOMBS)

The Secretary of State for the Home Department (Mr. Herbert Morrison): By the leave of the House I wish to make the following statement:
Since I made my statement in the House on 16th June, about the use by the enemy of flying bombs against this country, we have had a week's experience of this form of attack, and I thought the House might wish me to give something in the nature of a general review of the situation.
I am sure that hon. Members will understand that I can only deal with the matter to-day on the broadest general lines. It is of the first importance that so far as we can avoid it, we should not give the enemy any assistance, which would enable him to direct his blind shooting, or any indication useful to him of the measures which we have devised and are devising to destroy his weapons, both at their source and during their flight. The attack started on the night of Thursday, 15th June, that is to say, apart from the slight attack on the Tuesday night, and has continued intermittently up to the present. There have been periods when some 10 or more flying bombs were in the air at the same time, whilst at others, single bombs have been despatched at almost regular intervals. The missile explodes with results equivalent to those of a 1,000 kilo. bomb, with extensive blast effect. Little damage of national importance has been caused and public utilities have been only slightly affected so far. There have been, as is inevitable, casualties and damage to property by blast. But there has been a considerable dispersal of these missiles over Southern England, and a substantial proportion have fallen outside built up areas and have done little damage.
According to the German wireless, the whole of Southern England is a scene of


desolation and the pall of smoke over the devastated areas has prevented German pilots from assessing the extent of the destruction wrought on London. According to the same inventive and imaginative source the British Government have abandoned London. Well, here we are assembled in Parliament in London. Such unintelligent lying on the part of the enemy defeats its own purpose, but I have been considering whether there is any way, without giving the enemy the comfort of a factual report as to how his attack is progressing, of giving the House and the public some information which will enable these raids to be seen in their proper perspective. I must be very careful not to go too far, but I think I can say this, and I hope hon. Members will not ask me to say more.
Last February there were raids on London on five nights between i8th and 25th February, lasting for an hour or two each night. These raids, as those who experienced them will know, were not nearly as heavy in scale as the raids which the people of London endured with such fortitude during a long period in 1940 and 1941. I have compared the number of persons killed in Southern England during the first five nights of the attack by flying bombs, with the number of persons killed in those five February raids, and the number is less than the February figure. I will not say how much less, because that would be of interest to the enemy.
So far, the results achieved by our fighters and anti-aircraft guns in destroying these things before they reach their objective have been substantial. A great deal has been and is being done to improve our defensive measures and we hope that we shall soon be able to improve still further on the results already achieved.
The system for giving warnings of this form of attack by the siren is working efficiently, but, of course, the intermittent arrival of these missiles over this country raises special problems, and I will merely say in regard to them, that I am keeping the existing warning arrangements under review, and that I shall be quite prepared to modify them if experience shows that modification is necessary. Broadly speaking, however, the existing arrangements are proving as effective for warning of

flying bombs as for warning of ordinary aircraft.
The Civil Defence Services have maintained the high reputation which they earned in the days of the blitz. All have done extremely well, but it is, perhaps, right that I should mention in particular the wardens' service, upon whom there has been a special strain, owing to the very long hours for which they have had to remain on duty.
While this statement which I have made has, as I have explained, necessarily been confined within certain limits for security reasons, I think I have said enough to satisfy the House and the public, that the situation created by the new form of enemy attack has no resemblance to the lurid and over-dramatised picture which Dr. Goebbels has painted for the gratification of the war-weary German public. The attack has had no material effect upon our war effort and if the enemy's intention was to upset the morale of our people he has signally failed. The morale of the British takes a lot of upsetting. Last Friday I asked the nation to go about its business as usual. As we expected, the nation has done so and in this fact we all take pride.
It may be that these attacks have not yet reached their peak and it may be that the enemy will improve his devices, or that other devices are in store for us. We must, therefore, continue our vigilance and we must not neglect any measures that will defeat his intentions, but if the experience of the past week is a measure of the attack which we may have to face, we can face it with a stout heart and every reason for confidence.
Hon. Members will forgive me if I mention again what I have referred to several times in this statement, namely, the care which we must take to avoid giving information to the enemy, and I am sure that hon. Members who wish to raise any point on my statement will keep this in mind in framing their observations or questions.

Sir Percy Harris: While thanking the right hon. Gentleman for his very full and wise statement, may I ask if he is aware of the extraordinary coolness of the public of Southern England and how they have been going about their ordinary affairs as usual without any disturbance? Will he, however, endeavour to make


arrangements, where families desire to evacuate old people or young children, that reasonable facilities should be available?

Mr. Morrison: I do not think I could make any statement on that at this juncture. I agree with my right hon. Friend that the people of Southern England have taken this magnificently. I will take note of what my right hon. Friend says, but it would be a matter also for the Minister of Health.

Mr. J. J. Lawson: May I, Mr. Speaker, as one Member from the North and one who has some responsibility with reference to Civil Defence Services, say how pleased I was to hear the right hon. Gentleman pay his tribute to the wardens' service in this case, because this form of attack peculiarly calls for courage on their part to be out and about when other people can be in shelters. With regard to the people of Southern England, we saw how they behaved in the old days, but I think their coolness and courage on this occasion in the face of this new form of weapon have never been surpassed. I should like to ask the right hon. Gentleman if he is quite sure that the whole of the arrangements for safety and shelter are available at all times of the day.

Mr. Morrison: Yes, Sir, I think I can answer that fairly in the affirmative. May I say that I am very grateful to my hon. Friend for that appreciative tribute from the North to the South?

Mr. Thorne: I am sure the House is very much gratified at the full statement made by the Home Secretary. There is one question I would like to put to him or to the Secretary of State for Air. Is there any use in scouting during these periods at night or during the day-time?

The Secretary of State for Air (Sir Archibald Sinclair): I am not sure what the hon. Member means.

Mr. Thorne: I mean our aeroplanes flying about—that is what I call scouting—during the night and during the daytime.

Sir A. Sinclair: I can only assure my hon. Friend that we take every practical step, both by reconnaissance and by fighter, to keep down this menace.

Mr. Cluse: May I ask the Home Secretary whether he thinks it is advisable

to warn the people not to be so careless as some of them are? I know we have a name for being a very phlegmatic nation but I am afraid it is a fact that too many people neglect to get under cover when the warning is actually on.

Mr. Morrison: I want the public to take a broad and sensible view and not to get themselves into needless danger. On the other hand, I have asked the nation to go about its business as usual. My impression is that the British people are an extraordinarily sensible lot, and that, on the whole, they will do what they think right, without Ministers telling them too much in detail.

Mr. Naylor: Will my right hon. Friend take steps to notify local authorities as to the desirability of executing immediate repairs where they are required, giving preference to smaller houses where the necessity exists?

Mr. Morrison: Yes, Sir. We will keep that in mind. I would like to say that the Ministry of Works deserve a word of praise for the speed and alacrity with which they have set about things, and also the workpeople in that Service. I am sure that the point put by my hon. Friend will be kept in mind by the various Ministerial and regional authorities concerned.

Sir Herbert Williams: Is my right hon. Friend aware that in the case of buildings partly occupied by certain Departments and partly by private individuals, the Departments requisition the best part of the shelter accommodation and very often keep it locked all night, so that people who want to sleep there cannot do so? Would he suggest that Departments should not be so selfish?

Mr. Morrison: I doubt whether that allegation is justified. I would say that there is an ample sufficiency of shelters. When I mention shelters, may I add that our old friend the street surface shelter, which was not always appreciated, has stood up to this, very well indeed.

Sir H. Williams: There are cases where Departments have locked shelters, against the people who have paid for them.

Lieut.-Colonel Sir Ian Fraser: Is the right hon. Gentleman aware that the ordinary citizen, the office worker in the


town or village in Southern England, is in fact going to work in the mornings and getting there on time? He or she is spending his or her time doing his or her ordinary job and is not interrupted every few hours by going to shelters but is, in fact, carrying on just as this House of Commons carries on. Is it not better that that should be so, rather than that we should encourage people to give up work at any time during the 24 hours?

Mr. Morrison: I entirely agree with the spirit of what my hon. and gallant Friend has said.

Mr. G. Strauss: The Home Secretary said that he is considering the warning system. May I ask him, in particular, to consider whether it is really necessary that the warnings should come on and go off a number of times during the hours, say, of midnight to six o'clock in the morning? Will he give special consideration to this point?

Major C. S. Taylor: On that same point, would my right hon. Friend also consider, where there is a local warning system, whether it is necessary to sound that particular local warning, for these missiles, in areas where the local warning was designed for other purposes?

Mr. Morrison: I will certainly keep in mind the point raised by my hon. and gallant Friend the Member for Eastbourne (Major C. S. Taylor) and follow it up. If my hon. and gallant Friend would let me have further particulars, it might help. On the point raised by my hon. Friend the Member for North Lambeth (Mr. G. Strauss), broadly speaking we try to act in accordance with the spirit of what he says. If we have reason to believe—and it is not too easy to form reasons to believe anything about the frequency of this thing—that there may be a break, for various reasons, we rather feel that it might be nice for the people to give them the "All Clear." However, I agree that it is a disputable point. I will watch it, and try to be as sensible as I can in regard to it.

Mr. Bellenger: Would it be possible for my right hon. Friend to indicate who is responsible for the defensive weapons used against these missiles? Is my right hon. Friend the Secretary of State for Air in complete charge? If so, would it be possible for him at some future date

to indicate the degree of success with which those measures are meeting?

Mr. Morrison: On the point of weapons the responsibility for active defensive and offensive operations in this matter, lies with my right hon. Friend the Secretary of State for Air. On the point of whether he can make a statement, I cannot speak for him.

Sir A. Sinclair: I think it would be very much better that the House should forbear asking for a statement.

BUSINESS OF THE HOUSE

Ordered:
That this day, notwithstanding anything in Standing Order No. 14, Business other than the Business of Supply may be taken before the hour appointed for the interruption of Business,"—[Mr. Eden.]

ADJOURNMENT

Resolved:
That this House, at its rising this day, do adjourn till Tuesday next."—[Mr. James Stuart.]

Orders of the Day — SUPPLY

[13TH ALLOTED DAY]

Considered in Committee.

[Major MILNER in the Chair]

Civil Estimates, 1944

Class I

House of Commons

Motion made, and Question proposed,
That a sum, not exceeding £334,821, be granted to His Majesty, to complete the slim necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1945, for the salaries and expenses of the House of Commons.

Ordered:
That the Chairman do report Progress, and ask leave to sit again."—[Mr. James Stuart.]

Committee report Progress; to sit again upon Tuesday next.

Orders of the Day — EMPLOYMENT POLICY

Order read for resuming Adjourned Debate on Question [21st June]:
That this House takes note of Command Paper No. 6527 on Employment Policy and welcomes the declaration of His Majesty's Government accepting as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war.

Question again proposed.

Lieut.-Colonel Elliot (Glasgow, Kelvingrove): We are now in the third day of this review of our post-war employment policy, and I think it ought to be possible to ascertain the trends of opinion which have manifested themselves during this

argument. I must, incidentally, say that I think there is something majestic in the way in which, both in this House and outside, the people of the country have continued their daily work without the slightest reference to the bombs or to excited propaganda coming from the continent on the subject of the destruction of London and how it has been laid in dust and ashes. It might be worth while, as a constructive suggestion, for the Home Secretary to issue the promise of a safe-conduct to any representative of Dr. Goebbels who would come over and photograph London for himself, on the understanding, of course, that he published the photographs without re-touching them when he returned to Germany. But, while it is majestic to see this people at war, the problem in front of us to-day is to prove ourselves equally majestic in peace, and that will be a more difficult task, because our antagonists in peace time are ourselves, and it is much more difficult to gain a victory over oneself, than over an outside antagonist. The difficulty in which we are placed to-day is that, while there has been, I think, very great good will manifested towards the White Paper, there is a certain uneasiness whether the means which are sketched out in it are equal to the task. Last of all, there is the underlying feeling, which has only been brought out in one or two cases: Where is the end of all this? In what sort of a State shall we find ourselves if these various measures are put into effect?
I do not think it is necessary to stress the good will the House has shown towards the objects of the White Paper, though that is, perhaps, the most important of the results of our Debate. Those of us who have taken charge of Measures in the House, know very well how the tone of a Debate is sometimes very much more important than the actual statements that are made in it, and the tone of friendliness, co-operation and good will which has been manifest throughout this Debate is one of the most valuable pointers towards the future success of the policy here sketched out. But I think it would be going too far to say that this was a revolutionary proposal, as some speakers, even from the Government Front Bench, have said. The responsibility of the nation towards those members of it who are unable to find sustenance, or to find work, has been


recognised for many centuries. Do not let us diminish the importance of the declaration, for instance, which was made in the Elizabethan Poor Law, because there, responsibility not only for sustaining but, if possible, for finding work for the people, was clearly recognised. The question, of course, is, "Will the measures which are going to be taken, be effective?" because that there should be help for those who have fallen, and even an organised attempt to find employment for those out of employment, is common to all parties and has been part of our Constitution for many hundreds of years.
We are dealing with the problem more particularly as it affects the new development of industrialism. The industry of this country, and of all countries, for many thousands of years, was agriculture. These problems we have had to meet in agriculture in the past, and have grappled with them with greater or lesser success. My hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) goes back to one of the oldest experiments in that line, the experiment of Joseph, in saving during good times and letting stocks of grain out during bad times—the parable of the lean kine. He was immediately taken up by the hon. Member for Dumbarton Burghs (Mr. Kirkwood), whose Biblical knowledge would not allow him to contain himself, when an Englishman was quoting the Scripture, and who pointed out that the difference then was that the lean kine consumed the fat kine, and were no fatter at the end than at the beginning. The whole of our modern development lies in the fact that great surpluses become available which are not entirely consumed, or should not be, in bad times, and it should be possible to have a steady movement of advance.
I think the difficulties of agriculture are difficulties which it is worth the while of industrialists to observe, because, there, we have a working model of an industry which, in the past, has had many difficulties of this kind to contend with, and has found on the whole not unsatisfactory solutions for many of them. In industry we are passing out of the stage of the great estates, the mechanical latifundia the great ad hoc industrial organisation worked with the sole end of high production. Great estates in agriculture were worked in the past with labour in semi-slave conditions. The

eagerness with which the world threw itself into industrial development produced very much the same effect as the planiation system which, in fact, produced conditions very similar to those with which we are now grappling. For unemployment itself is not a difficult thing to get rid of. The difficult thing is to preserve a good life, Employment in itself is merely a means to an end—the good life. In the gospel of work for work's sake in the 19th century caused by the opening of the industrial era and the Calvinist philosophy which accompanied it, work was almost exalted into being a virtue for its own sake and lack of work was regarded as, in some way, a moral crime, as well as an actual inconvenience. I do not think that any of us will say today that if we have nothing to do it is essentially a moral wrong. It may be that it is very inconvenient, but it is not morally wrong for anybody to have a rest, and I hope that that gospel will never be part of the creed of the people of this country. I myself heard Gandhi say that nearly all Indians are unemployed for nearly six months in every year. Unemployment is a feature of primitive agricultural society, as it is a feature of industrial society, but the organisation of agriculture may be so perfected that these long periods of unemployment are obviated. Thereby a great advance in the conditions and standards of living takes place. That is possible in industry also.
Industry has passed into a state where continuous employment is possible, a continuous employment which will lead—and this is why people wish to be continuously employed—to an improvement in the standard of living. But that improvement must be moral, as well as material. What some of us on this side feel a certain uneasiness about, is that in the overemphasis on the attempt to remove unemployment, we may remove liberty along with it and that our last state, though it may not be worse than our first, may produce other sorts of evils not less depressing. There is no complete remedy for these dangers. The only remedy lies in the willingness to give and take, to argue out the future as we are arguing it out in this three days' Debate. Therefore, I will not devote any length of time to an examination of the detailed proposals sketched out in the White Paper. Many of them are of dubious


advantage. I am not happy, for instance, about the proposal to vary the insurance contributions. It seems to me to be against the very essence of insurance, that the premium should be higher when the risk is falling, and lower when the risk is rising. It is the sort of thing that will make people doubt whether this is, indeed, an insurance scheme at all, and whether it is not simply a sort of taxation. However, the broad lines on which we are examining this problem are very much more important than any particular details which we have to consider.
We are trying to work out for our country, or group of countries, an industrial system which will fit it as a man's clothes fit him. Now the first point I should like to stress is that these systems will, inevitably, differ for different groups of nations and different societies. There cannot be one cast-iron system adapted universally. Our proposals in this Paper have caused comment in the United States, for instance. They are doubtful if we are wise in going along these lines. I am sure that they will cause comment in Soviet Russia. At any rate, they have caused comment by a representative of that philosophy who sits in this House. I am sure that no single system will be universally adaptable and we have to consider whether this system will suit us. The working out of this industrial system will require a considerable amount of insulation from other systems. This will not be achieved by sweeping away the barriers. It will not be achieved by an over-emphasis on international trade. It will be necessary for us to face up to that and to ask those with whom we desire to co-operate to face up to it also.
In the Debate on Monetary Policy in this House one noted how apprehensive the House felt at being brought too closely into a general world system. I was astonished to hear that hon. Members seemed to think that this White Paper exploded Tariff Reform or Imperial Preference. It means a much greater emphasis upon those matters than ever before. It means that we shall not merely have to co-operate with those with whom we can co-operate economically, but that we shall have to co-operate with those with whom we can co-operate politically. The first group with whom we can co- operate politically are the great sister nations of the Commonwealth. The

next group is our Colonial Empire. That has been stressed strongly by the Minister of Labour in his most interesting speech. It was stressed by my hon. Friend the Member for Sea-ham (Mr. Shinwell) and it has been stressed repeatedly in this and other Debates. All these things mean that the element of choice, the element of direction, will enter into our foreign economic relations much more closely in future than they have done in the past. When we are recommended from across the Atlantic to sweep away all forms of what is called trade discrimination, one has only to say that there is not enough capital in this country to equip every place in the world at the same time and that priorities will need to be established. Equipment will need, in the first place, to go to the nations with whom we are most closely associated. To bring it down to a fine point, when it comes, say, to building a railway in the Argentine or Nigeria, Nigeria will need to have it every time. We may call that discrimination or choice. I prefer to call it choice.
That is the first point I should like to establish as one of the lessons of the Debate upon which we are now engaged. There is nothing odd about it. Other great communities which have developed themselves economically and have sought for a policy of full employment have themselves taken the line of insulation, and in some cases a complete insulation, from the outside world. [HON. MEMBERS: "Russia."] Russia, perhaps, is the most extreme example. Nobody could say that Russia's success in abolishing unemployment has been gained by sweeping away all the barriers and omitting to use any discrimination whatever in foreign trade. Although this is a small country and Russia covers one-sixth of the globe, the countries with whom we co-operate make up a great country and are greater in their need for development than Russia. The United States group also held themselves together by a strong insistence upon a barrier to insulate them from the full impact of the developed industrial systems of Europe, which, at the time the United States was starting its industrial career, could have swamped out their growing industries without the slightest difficulty. They insulated themselves, however, and produced this enormous industrial system which is now the wonder of the world.
The second point I should like to commend to the House is this. The policy upon which we are now embarked demands a high degree of continuity. I find that hon. Members who demand a continuous policy are apprehensive of the political continuity which will be required to ensure that an economic continuity is maintained. The hon. Member for Seaham asked whether the White Paper was a manifesto for the Coalition Government. Undoubtedly, there is a danger that continuity may destroy altogether that healthy business of "Sack-the-lot," which, from time to time, has proved a very salutary practice in the operation of this country. It will mean this at any rate, that Governments will need to give at least a tacit consent that they will not reverse the works of their predecessors. We have seen in agriculture, economic interference by the State in a desire to maintain employment in that industry, and the disastrous effects of a sudden reversal of policy. The repeal of the Corn Production Acts is something from which the countryside is still sore, suspicious and uneasy. In another sense, the repeal, or the allowing to lapse, by the Labour Government of all the McKenna Duties is another example. These duties were put on, taken off, and put on again in a very short time. If we are to adopt this principle of the State coming in, full-blooded, as has been said by the Minister of Labour, to deal with these problems, it will certainly not be possible for the State or the governing body of the State to blow hot and cold, to play fast and loose.
That will present a new set of problems for this House. The events to which I have referred are fresh in many minds. The repeal of the Corn Production Acts to Members of this side of the House who are interested in agriculture is paralleled for hon. Members on the other side, who are interested in coal, by the sudden convulsions which came to the coal industry when coal control was taken off. Schemes were swept away suddenly and the coal industry had to adapt itself overnight to quite novel conditions. The implications of this White Paper will involve this House in problems of how to preserve continuity in home policy to which we have in the past been strangers. You can alter political decisions, but economic decisions have consequences outside this

House and are much more difficult to alter.
The next point to which I wish to call the attention of the House is that such a policy will involve new problems of managerial skill, the selection and training of those who are to carry out such work, semi-public and semi-private, working under the control, to some extent, of this House. They will require to be recruited and trained in some field which, I must say for myself, I do not exactly see. I certainly think that too great an encroachment by the State on private enterprise may go far to weaken or cut down the supply of men capable of taking on these great responsibilities. I have had experience of administration, as have many other Members of this House, and the adventurous T. E. Lawrence type of mind is not always the most encouraged in the Civil Service.

Mr. A. Bevan: Is it encouraged on many boards of directors of the vast corporations of this country? Do not men of 70, 80 or even 90 years of age, hold on to their power while younger men are rotting?

Lieut.-Colonel Elliot: I do not deny that in smaller as in greater enterprises, in guerilla warfare as in regular warfare, you may have men hanging on to power long after they ought to have given it up. If my hon. Friend has seen the film "For Whom the Bell Tolls", by Ernest Hemingway, he will have seen a good example of a guerilla leader getting past his work. That guerilla leader was turfed out.

Mr. A. Bevan: You cannot do that with a board of directors.

Earl Winterton: Has my right hon. and gallant Friend ever known a case of guerilla warfare on the railways getting rid of the directors?

Lieut.-Colonel Elliot: I do not deny it. I am very much obliged to my Noble Friend for having brought forward that point. These enormous corporations, such as the L.M.S.——

Mr. A. Bevan: Or the I.C.I.

Lieut.-Colonel Elliot: Well, or the I.C.I., or even the co-operative societies have, in fact, many of the defects to


which I was alluding. I say that, in so far as you get these gigantic combinations, whether of private enterprise or, the most gigantic of all, the State, you weaken the chance of the adventurous man coming to the front and obtaining a chance to try out his ideas. It was not difficult to push over the guerilla leader in the cave in "For Whom the Bell Tolls", but if my hon. Friend the Member for Ebbw Vale (Mr. Bevan) has ever read the experiences of those who tried to alter the high command in great armies, he will see that it is a very much more difficult affair. The adventurous type of mind with a high degree of initiative must be selected and encouraged if we are really to rest this White Paper on a sound basis, that is to say, on the basis of high production, of constantly increasing inventiveness and adaptability. We are not, for a moment, discussing the question of nationalisation, or of private enterprise. I am merely saying that the bigger a committee, in general, the more powerful its hand, and the more deadening its effect on individual initiative.
That brings me to the last point, at which two good things conflict with each other. Which of us could fail to have been struck, during the speech of the Minister of Labour, with the part in which he spoke, as a leader, of his great battles as a trade unionist, and when he said he had had many a fall, both shoulders down, with hon. Members behind him, and those falls were not always on one side? There was a man talking, glorying in the great battles of the past. But, said he, what had happened during the 17 years of ups and downs was that, at the end of it, wages moved five points. Was it worth it? I am not at all sure that the answer is entirely in the negative. More was gained than a mere movement of five points, during those 17 years of argument, of come and go, and of organisation. There was gained the Labour movement itself, the tough, fibrous, resistant structure of the great self-governing units of the industrial population, which proved such a stand-by to the country when it came to a crisis, like that in which we now are. The Minister of Labour was asking whether the struggle was worth it, merely on the economic ground. I think it is true that, by a policy such as is proposed, you could certainly do a great deal

with less effort and struggle, but what you would lose would be the struggle.
I am asking whether, in fact, we cannot go too far in our desire to obtain peace, in obviating the toughening process by which you grow men. After all, one result was the right hon. Gentleman himself, member of a War Cabinet, conducting an enormous and successful campaign, and sitting there on equal terms—and rightly so—with everyone else. He was not trained in the step-by-step escalator process of the Civil Service. He was trained, as he said himself, in many a rough fall, in which both his shoulder blades had been touched down, time and time again. Trade union leaders of my own acquaintance have said to me that the modern system, under which everything has to go back to some national meeting, and also be agreed with a national meeting on the other side, is not conducive to creating men who can take individual decisions, who act quickly as in similar disputes in the past. Even their great Labour committees put a deadening hand on smaller committees and smaller committees have the same effect upon the individual. The right hon. Gentleman commended this plan to us as the bringing of peace. I think that is true, but if we remove the element of struggle in that way, it will, somehow or other, need to be restored in some other way, or we shall be governed by the kings and the "Yes men" instead of by people who have worked out their own salvation.
The bull-dozer of the State is to be brought in to clear away the rubble, and open up the roads. Bull-dozers are not everything. A group of men who have never seen anything cleared, but by a bulldozer, are apt to sit with folded hands when one is not available. Many a crisis is yet to come in the history of the nation and for these the initiative of people who have worked things out for themselves will be necessary in the future as it has been in the past. On the other hand, the right hon. Gentleman spoke of a code of conduct. That, I think, was the essential point of his speech and the essential point in the White Paper. It should be a high code of conduct for the employer and a high code for the employee. To produce a code of conduct under which all the partners in industry have a sense of responsibility towards each other, and yet a sense of individual liberty which


enables them to take their own decisions and to challenge facts for themselves both in argument and in action, that is the real task. It is much more in atmosphere than in laws that such a solution will be found.
Therefore, while I welcome the White Paper and agree that many of the points which have been made in criticism of it will rub out in practice, I welcome much more the tone of the Debate and the hopeful outlook which has been manifest in speeches here. We are the first nation that evolved an industrial system and we must be the first nation to find the road out from the industrial system, and the road out will certainly mean that we shall have to bear with each other, to trust each other, to believe in the good intents of each other. We are faced with a time which has been called a time for greatness. Certainly it is a time in which if we do not arise to the height of greatness we shall fall to a very low level. For we are a small nation, and unless we can make ourselves the head and front of a group of nations great enough to stand beside the other great groups which have come into existence we shall be in the same position as the Continental nations were after the last war. They were endowed with power which they had no strength to exercise. They were given responsibilities which crushed them under their weight. That is the danger, the danger of inadequacy which lies in front of this country, that is the danger which we have to avert, and only in the spirit of good will which has been made manifest in this Debate will this country be able to pull through.

Mr. Tom Brown: In the first place I want to congratulate the Minister of Labour and National Service, not only on the presentation of the White Paper, but on the very courageous speech which he made on Wednesday. That speech contained some highly significant and important statements, too many for me to dwell upon in the short time at my disposal. On the question of full employment, the White Paper reveals-the desire of the Government to fulfil the truth contained in the dictum:
There is dignity in labour and degradation in enforced unemployment.
If we are to give that dignity to the men and women who have gone through hell to protect this country in its darkest hours, we shall have to apply our minds and

our hearts to the legislation that must follow, with the courage that has possessed the Minister of Labour. As I have said before in this House—and I make no apology for repeating it—it is the duty of all citizens to do their best for the State. Having said that, I also say that it is the duty of the State to protect those citizens who have done their best for it. Protect them from what? Protect them from poverty, want and unemployment, or, as the Prime Minister said, provide them with food, houses and work.
I think one of the most dramatic statements made by the Minister of Labour on Wednesday was that in which he recalled a question put to him by the troops who were embarking for the invasion. The question and the reply were, in my judgment, great. They said to him as they were about to embark upon one of the most dangerous undertakings they could be called upon to face, "When we have finished this job, are we to come back to the dole?" The answer was, "No." That answer, given by the Minister of Labour, was confirmed by the Prime Minister. Therefore, I say that this House and the Government are committed to honour the pledge given to these men by the Minister of Labour. That has been said before, but not said by the same man, and not said under the same circumstances. I would claim the indulgence of the House to quote what was said in the first year after the last war, in 1919:
The old world must end. Millions of gallant young men and women have fought for the new world; hundreds of thousands have died to establish it; if we fail to honour the promise given to them then we dishonour ourselves.
What has the new world meant to them? It was a world where, for millions of honest workers, men and women, toil purchased nothing better than squalor, poverty, penury, anxiety and wretchedness. It was a world scarred by shims and disfigured by sweating, where unemployment, through the upheavals in industry, brought despair to multitudes of humble homes; a world where, side by side with want, there was waste of the inexhaustible riches of the world, partly through ignorance, partly owing to lack of forethought and partly arising from deeply entrenched selfishness.

Sir Herbert Williams: Who was the author?

Mr. Brown: The hon. Member will find out. If we renew that lease we shall betray the heroic dead. We shall be guilty of the basest perfidy that ever blackened a people's fame. I have asked myself this question: Who is responsible for the non-fulfilment of the promises made to the men and women in 1919? I want to ask the Conservative Party, Why was the promise not honoured?

Sir H. Williams: Why not ask the Labour Party in 1929?

Mr. Brown: I want to ask the Land Union why the promise was not honoured.

Mr. MacLaren: Now the hon. Member has got it.

Mr. Brown: I want to ask the National Federation of Property Owners why that pledge was not honoured. I want to ask the Federation of British Industries why that promise was not honoured. I want to ask the latest born, the National League for Freedom. There you have a nap hand. They have failed to honour a promise given by responsible Members of the Government.

Sir H. Williams: Who made the promise?

Mr. Brown: It is all very well for the hon. Member for South Croydon {Sir H. Williams) to interject, if he is somewhat disturbed by the statements I have made, but I want to refer to another statement that has fallen recently from the lips of an important industrialist in this country. Listen to his declaration:
If there is to be as much red tape as the Uthwatt Committee proposes, before a new factory is built, we feel that industry may prefer to go to other countries and profit by a greater freedom of operation and lower taxation.
There is a free gift of a gem of patriotism uttered by a responsible industrialist who is talking already about taking industries from this country into other countries, because of lack of the freedom which he thinks should be permitted to him. Listen to the second declaration made by the retiring president of the Federation of British Industries:
We are engaged in a struggle for individual freedom and individual enterprise, and against the theory of the domination of the State to which all other interests must be completely Subservient.

My right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot) referred to the salient point made by the Minister of Labour when he said there must be a code of conduct and that code of conduct must be a good one. If we are to have a code of conduct in industry, statements like that which I have just quoted had better be left unsaid. One of the reasons we have failed to introduce a code of conduct into industry and into commerce is that the people who were responsible for introducing such a code have manifested, in days gone by, an attitude of stupidity, an attitude of indifference and of lack of foresight. Therefore, in my opinion, humble though it is, it will require a measure of compulsion by the Government to bring about the code of conduct referred to by the Minister of Labour.
The Command Paper on full employment is a statement of aims to be attained and a precise plan for attaining them, but the goal of full employment cannot be reached unless policies are co-ordinated in the many different fields of activity. I would refer to statements made by one of the leading coalowners in this country on Tuesday of this week—this is a trend of opinion. What does he say will have to be done to put the coal industry on its feet? At the annual meeting of a merger group which has a capital of £5,500,000 he said:
The plans of private enterprise are devised not for selfish ends but to enable the coal industry to take its place—a leading place—in the country's economic life.
Secondly he said:
The coalowners plan to give the workers the best possible conditions of work and wage.
That is what we have been striving for "for donkey's years," as we say in the pit. We have been endeavouring to get the coalowners to provide good conditions, to pay good wages. The wages of the miner would not have reached the standard they have reached to-day had it not been for the intervention of the Government. The third point he puts forward is this:
The coalowners are conscious that the consumers, like the workers and owners, must not be ignored.
These are three good points, but in the concluding stages of that meeting there was an expression by the shareholders,


and here it is. They hoped that next year they would be offered:
something more than a meagre 2½ per cent. dividend.
There you have the kernel of what we call the effect of private enterprise—everybody looking for dividends at the expense of those people who provide the wealth of the industry.
I speak as one who has gone through the trials of unemployment, and if I can control my emotions, and I hope I can, I want to say from my own experience that there is nothing more degrading and more demoralising than to be unemployed after living an active and industrious life. It had a tremendous effect upon me, and I had to face up to the situation. How was I thrown out of work and why was I thrown out? Because of a family squabble in a certain colliery company who could not settle their difficulties within the directors' room. On 3rd February, 1937, they threw out of work over 1,300 men and boys. To me it is criminal that a thing like that should take place. Despite all the attempts we made to reconcile the differences, the family differences, bringing all the influences we could to bear upon them to settle their dispute in order that men might be employed and earn wages, we could not get these people to see eye to eye with each other. The result was that 1,30o men and boys were driven into the ranks of the unemployed. I never anticipated at that time that I should become a Member of Parliament, and hon. Members can quite understand my feelings. I say here and now that whether it be employer or employee who stands in the way of progress in commerce or industry, he ought to be swept away.
If it is possible, and it has been proved possible, to marshal all our force, energy, talent and skill for the purpose for which we have marshalled them during the last four years, it is possible to marshal the same forces in order to create industrial prosperity and prevent mass unemployment in this country. Therefore, I welcome the White Paper in its general outlay. I am looking forward to the legislation which will come within the terms of the White Paper, and I should like to put one or two questions to the Minister of Labour or the Minister of Production, who is to reply to the Debate to-day. Are the Government going to give any consideration to the fulfilment of the

promise made to the miners some time ago to shorten the working day? Secondly, what is the Government's proposal to deal with the factories which will go out of commission for war production? I am speaking now of the factories that have been built and maintained by Government money. Will they allow these factories to go out of commission? Will they allow them to pass into private hands? Are they going to allow all that money to be wasted, when by courage or foresight they could utilise the factories for producing, not weapons of war, but the requirements of the ordinary man and woman of this country? I say to them, as a very humble ex-miner, that the time is coining when there will have to be just the same courage manifested by the members of the Government and this House as has been manifested by our men in the Army, Navy and Air Force.

Sir John Jarvis: Upon a wise solution of our unemployment pokey depends much of the prosperity of our land in the years that are coming, and, what is perhaps more important, the happiness of our people. I share the views of the hon. Member for Leigh (Mr. Tinker), when he said in the Debate yesterday:
To me, the national assets are the human beings in the country. They are the assets and they have to be looked after."—[OFFICIAL REPORT, 21st June, 1944; vol. 401, c. 246.]
He and I may differ as to the road we must traverse, but we are in agreement as to our goal. It has been my good fortune to try out in practice in the worst Distressed Area in our land during the past ten years many of the proposals contained in the White Paper. Perhaps it may be profitable if I tell the House something of the story, as it indicates how chronic unemployment can be permanently cured. I went to Jarrow in 1935, because the Ministry of Labour told me that it was the worst Distressed Area in England. I knew nothing of the town or neighbourhood, but I hoped that if I could cure the worst Distressed Area in England it ought not to be beyond the power of the Government to deal with the others.
Never have I seen such a grim sight as I saw in Jarrow when I first visited that town. All the industries were closed except one; eight out of ten men were unemployed, and some of them had been for years and years; groups of men stood


idly at the street corners, tragedy stalked across Palmer's famous shipyard; no new generation of skilled men was growing up. Many of the houses were hovels, most of them were dreadfully dirty. Hon. Members know the story; they have heard it so often that I need not labour it. Imagine yourself dumped down in a town like that, as I was, rather further removed from your home town than Amsterdam, Brussels or even Paris, and trying to create its life anew. How would you begin to begin? My native town in Surrey quickly subscribed £40,000 for immediate ameliorative work, not as charity. The people were poor but they were proud. They did not want charity. In all our plans we offered co-operation, if we gave the materials and the men gave their labour and vice versa. Very briefly, this is what we did: We first provided the material with which unemployed men might redecorate their houses. Over 4,000 houses were redecorated by this means. We laid out a 60-acre park, and men worked for wages. It may be interesting to know that this was the first guaranteed week job done in the land. We laid out bowling-greens, paddling-pools and children's playgrounds. We had £580 from the children of the elementary schools of Surrey, to pay for these playgrounds, and in making them we employed 1,500 men, none for less than a month. It was the best way of reconditioning them. We did very much more than this. We laid out a vast stadium and redecorated clubs, halls and welfare centres on co-operative lines. Thus we were doing something, and doing it quietly, something to make people cheerful, and give them hope, and let them know that they were not forgotten.
Why was it that this town had got into such an appalling state? Some placed the blame on the industrialists who over-distributed their profits and failed to build up proper reserves; others blamed the National Shipbuilding Securities Company for closing shipyards on the grounds of redundancy; others blamed labour; since the seven months' coal strike had closed down the blast furnaces, which were never reopened, and others blamed successive Governments for promising to cure unemployment and failing miserably. You may take your choice, according to your political convictions. If you ask me, I should say that probably none were without blame. By 1937 we had brought

new industries to Jarrow, so that before the war it ceased to be a Distressed Area. To-day you will find the town humming with prosperity, through the activities of engineers, shipbuilders, ship workers, steel makers, foundry men and members of a variety of other trades who are busy in works and factories. The war has helped but depression ended before the war started.
Let me tell hon. Members how this came about. I searched the world for new industries suitable to the neighbourhood, preferably to provide work which had never been done there before or never so efficiently. The men were mostly unskilled, or at best semi-skilled, and if we were to compete in the industrial markets of the world we should need the best industries we could find equipped with the most modern machinery. I wanted the best and I did not mind where I got it. I bought new tube mills in Germany, electric steel furnaces in Italy, a high-hardness roll industry from America, ships to break up at home, and a great deal of British equipment. To-day, at Palmer's Yard, you will find large numbers of men engaged in shipbreaking and ship-repairing. I bought the "Olympic" and then the "Berengaria," and had men trained in dismantling work so that we might not lack for scrap. Today, in our steel foundry we are making high grade alloy steel and intricate steel castings. We are making hot and cold drawn tubes in the tube works, metal pressings and special forgings in our engineering works. Another large factory makes pneumatic tools, while in Gateshead and Hebburn, as well as Jarrow, we manufacture other things which we do not talk about.
Two further industries were started in Jarrow from other sources, so to-day we have seven new industries and one old one, all producing the maximum output. All these works fit in with a planned economy and make the whole scheme largely self-contained. Have I had difficulties? Of course; they Dame from every quarter, but that is another story which I shall have to tell some other day. I am, however, comforted in remembering that, to-day, at these works, there are over 6,000 people employed. This gives employment to at least 6,000 other people, who provide their food, clothing, amusements, transport, and the new buildings they occupy and the machinery they use. Thus


employment begets employment. The wage roll of the men and women employed approximates to £30,000 a week, so that in spending power alone we have brought to this small part of Tyneside more than £1,500,000 per annum.
Hon. Members may be interested to know that although the town was derelict 10 years ago we have saved, in War Savings, since the war began, over £1,000,000. Jarrow has responded nobly to this opportunity. We have only 15 per cent. of normally skilled workpeople in our factories. All the remainder we have trained ourselves. Indeed, we had trained 1,000 women, who were taken by the Ministry of Labour and placed where workers were more urgently required. I do not blame the Minister for that; I know we have sent him Low very good girls. Our production costs are as low as any in the land. We can get all the work we want in competition and make a profit—and I am not a bit ashamed of making profits, for they are the test of efficiency. We have saved the State over £1,000,000 by taking people off the unemployment register, and by the lower cost of buildings, plant and output we have provided for Government orders. Jarrow is generous in her days of prosperity. When my right hon. and learned Friend the Minister of Aircraft Production and Lady Cripps visited the works recently our workpeople subscribed £500 for the "Aid to China Fund."
All but one of these works were started in peace-time. The story that they were started for munitions work is just nonsense. We aimed at something much higher than merely providing work which someone else could do in some other town. For example, we built up a wide export trade, and besides our European customers we had substantial orders for our specialities from Australia, Canada, New Zealand, Africa and India. This trade we have every hope of regaining. As has been emphasised so often in this Debate, it will be of vital importance to the nation that its export trade should be as large as possible. Meanwhile, much of our peacetime production goes on, and it will be expanded rapidly when the war is won.
How does it come about that this once derelict town can now compete favourably, both in price and quality, with similar trading concerns? I can give the answer in a few words. We have selected the most suitable industries, they are

modestly capitalised and economically managed, we have trained our own local people in our own works, and last, but by no means least, we have tried to make our employees happy and comfortable. Let me give an example of this: When we had found work for all the Jarrow men we decided to train Jarrow women, long before it became universal for women to play their part in industry. Very early in the war we invited men to bring their wives, daughters and sweethearts to the factories for a fortnight, not to work, but to stand beside their men who were operating the machines, to watch all that was going on and get a sense of factory life. At the end of the fortnight, if they did not like it, they took a fortnight's wages and we said "Good-bye," but 97 per cent of the women remained. Some interesting points arose out of this experiment. We found that women could not stand as long as men, so wherever possible we provided them with seats. We worked the women short shifts, and saw that they had a hot meat meal in the middle of each shift. We staggered their shifts so that they always had some shopping time, and we provided nurses, doctors and women superintendents for their welfare. All this brings financial advantage to any employer. It decreases absenteeism, it increases production, it provides the decencies of life and it engenders the spirit of the big happy family.
Before I went North, I was warned that Tyneside was very "red," and I was promised endless labour troubles. Well, if I had been a man of Jarrow, and had lived through its years of depression, I should have been a very "red" revolutionary myself. I am happy to tell the House that, in all the seven years, not one day has been lost through strikes in my own industries. There must never be any more Distressed Areas like Jarrow. No Government scheme for paying wages without asking any return will prevent it. I believe that my plan to create work for unemployed people is far better than paying them to remain idle, because unemployment creates unemployment. I believe that success has only been possible in Jarrow because it has been sought in a practical and human way. It is useless for us here to say that there must not be unemployment, unless we bring forward constructive and workable proposals to prevent it. I am happy in believing that the proposals in the White Paper go a


long way towards curing this evil scourge of mass permanent unemployment.
I hesitate to speak of my own financial interests in this venture, but I thought it might be in hon. Members' minds, so I may as well tell them. The capital cost of employing all these men and women has been something over £1,000,000, most of which I have had to provide myself, because there was no other way. On my own shareholdings and loans to the companies, I have taken neither dividends nor interest, nor received any directors' fees, remuneration or even out-of-pocket expenses. One great advantage accrues from this arrangement. When Jarrow asks, "How much is he getting out of it?" the answer is, "Nothing." For this I can claim no special merit; rather has it been a privilege to lend a hand in such an interesting social experiment. What are the lessons to be drawn from this work in the North? First, that it is wiser to take the work to the workers, and not direct them to industries elsewhere if it can possibly be avoided. You cannot imagine how much Tyneside men or women hate being sent far from home and how unhappy they are. Their roots are in their old homes, and they cannot lightly tear them up. Secondly, workpeople should be trained where they are to work, instead of being sent to training schools far away. In 1939, Jarrow boys were told to go for industrial training to schools in Luton. This was so far away that their mothers were afraid they would never come back. Thirdly, financial help should be available to industrialists who risk starting factories in backward areas on reasonable terms, not to add to their profits so much as to minimise their losses. There ought to be grants for training, at least equal to the unemployment payments which are saved to the State. Otherwise, we may be training men who will then all be taken away, as the Minister of Labour has taken away the girls.
I also want to say a word to the Chancellor about finance, because the Excess Profits Tax is murdering industries in the Special Areas and may soon throw them back into depression when the war is aver. Businesses such as I have mentioned have no pre-war standards, and are allowed to retain only the most modest percentage standard, which cannot be increased, however much output expands. How would labour like

working for pre-war wages to-day, and getting nothing for overtime? In the first years of working at Jarrow, these new industries lost the greater part of £100,000. We expected it. You cannot start new industries, train men, find markets, and all that sort of thing, without losing money. To-day more than go per cent, of our profits is paid in taxation, war damage insurance, A.R.P. contributions, and so on. The result is that we have been able to pay no dividends on the original preference or ordinary shares, although the companies are all earning very satisfactory profits. All that is left, after the Chancellor has raided our hen-roosts, is being ploughed back into the businesses. But even that does not enable adequate reserves to be created, to enable us to face with reasonable hope the troublous years ahead. He really must do something about it.
I am not a believer in any Government seeking to run industries themselves. I believe that the most that any Government can do is to create an atmosphere of confidence, in which trained industrialists can do fruitful work. Remember that a Government Department dare not run risks. How far should I have gone with my project if I had made "Safety First" my motto in Jarrow? Last year I bought out the interests of the Government and the Nuffield Trust in my companies. I was not unmindful of their help, but I needed a free hand, so that I might take all the risks. You see, I am an individualist, as well as an industrialist and an idealist. I have had to take tremendous chances in Jarrow all the time. I took them cheerfully and immediately. I knew that there was no other road to success. Industries in a distressed area can succeed only if they have behind them men of persistence, courage and vision, combined with commercial, technical and financial experience, and, above all, big hearts and human understanding. Our country is rich in leaders of this kind, and they could easily be found. There are men who, having made their mark, would gladly give their time and energy to the interests of the nation, seeking no reward save the joy of having served their day and generation. Let the Government of the day find only a dozen such; Let them be clothed with power and authority to deal with such problems, if they ever arise again, and in that way we shall conquer those problems. This may sound


revolutionary, but remember that such a scheme has been tried out in one of the worst Distressed Areas, and that it has proved its merit. I am fortified in this belief by the foreword of the White Paper, which says:
for employment cannot be created by Act of Parliament or by Government action alone.
I believe that to be profoundly true, just as I believe the concluding words, which read:
The success of the policy … will ultimately depend upon the understanding and support of the community as a whole and especially on the efforts of employers and workers in industry—
to
achieve a high level of employment.
That is the wish of us all, and if we succeed we shall write a new and blazing page in the annals of our history.

Mr. MacLaren: I welcome this opportunity of a discussion of the problem of unemployment. There is no test question which is more devastating for Governments and economists than the question: "How do you propose to deal with unemployment?" During the last war, I remember sitting in the Gallery of the House, listening to the fatuous promises made by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). He promised us devices which brought ruination such as has been described in that very human speech which was delivered by the hon. Member for Ince (Mr. T. Brown) to-day. What is the cure for unemployment? That question should ring through every Chamber in the world to-day, and through the universities which pour out these so-called economists, who spread such documents as we have before us to-day.
What are the facts? Let us look at them, free from the nomenclature and claptrap which pass for wisdom among these products of university training. Here is a world where every human being is a veritable source of demand, insatiable in his desire for things. Yet we read in this document of demand falling off. Good heavens, God has not been so mad as to create man wanting things, and to leave him devoid of the power to create them. Not only does man want things, but he has, within his body, the power and ability to produce things to gratify his human desires. These are obvious

facts, simple to a child, but hidden from the teachers of economics in our universities. If man is insatiable in the demand for things, and if he has the power to produce things, and if he moves on this vast earth in the bosom of which are all the elements which he can use, mould, shape, and change to gratify his desires, I ask the economists, as I ask this Government: Why is he unemployed? What stands between this desire for things and the land for which man creates things? I can answer that, because I have the advantage that, when I stand up in this House, I do not need to mention what I really mean; all hon. Members know. Constancy has its own reward, even in politics. There is not a man in this House who, when I pass on, will be able to read a contradictory speech of mine. I have stuck to this policy, and, as a member of the Government said on one occasion, "The grave-digger, when he is putting MacLaren in his grave, will say, 'There goes land values.'"
Let me be as emphatic as I can on this, because this is a test of statesmanship. How often have I seen, while I have been in this House, and before I came into it—going back to 1912—Minister after Minister standing at that Box with devices to cure unemployment, or promising to do something to circumvent unemployment, and, despite their prides and conceits, they and their schemes have now passed into oblivion. One of the most comical attempts was that of the last Labour Government that tried it. May I remind the House of the time when Mr. Thomas, Sir Oswald Mosley, the present Secretary of State for Scotland, and Mr. George Lansbury almost overtook time, by the speed with which they rushed to solve the problem? I remember Mr. Thomas saying in this House that they were going to pull the wooden sleepers from under the railways, and put in steel, to give work to the steelworkers. Then Sir Oswald Mosley, of beloved memory, said that he was going to spend £73,000,000 to rebuild Liverpool Street Station. I remember Lord Runciman getting up and saying, "£73,000,000?" Yes, he was assured, because anything less would not solve unemployment. What a ghastly performance was that. These schemes did not solve unemployment. All the things in this White Paper will not solve it.
When you are facing an economic problem, you have to be very careful that, in each step you take in the solution of the problem, you are keeping in harmony with natural laws. If you sidestep them, and try some device, you will get into such difficulty as will lead you to State servitude. What do we see in this Government? This is a Coalition Government, with Conservatinve Members sitting in it. I think that the Chancellor of the Exchequer is the only Radical sitting on the Bench. The other Members—most of them what is called Conservative—will be very apprehensive about State control, State ownership or State domination, but the very fear of what might happen, unless they say something about what they are going to do with unemployment, has made them accept a document which, they feel in their hearts, is going to lead to State domination and State control. They know it, but they dare not say it. Every time you invent some device to deal with the results of unemployment, in the very nature of the case, you are bound to create State Departments, bureaucrats, inspectors; and, even then, you have not cured unemployment, but you have created new officers.
I remember how, in 1906, Sir William Beveridge and a few others got together to report to the Government on what should be done then. The Government of the day were almost as bad as the present Government, because they talked about an Economic Council. I should like to know the names of those people. In 1906 economists were called in. They are the last people you should go to for common sense. They know nothing about life; they swallow everything they are told by weary lecturers and they put it down on cuff or notebook, reproduce it in examination papers, and gain degrees. Sir William Beveridge said the way to solve unemployment was to open employment exchanges, so that the men would know where they were to go to get a job. Then there was the tripartite contribution. When you had unemployment, it was said, the best thing to do was to have a fund, out of which the men could be fed; so there was a tripartite contribution from the Government, the employers, and the men. There is a strange thing called depression, or slump, and, in order to meet the slump, we must have a fund, created in good times—notice the same

fallacy in this Paper—and then they can all draw on the fund when the depression comes. You have now thousands of officials in these exchanges, a vast band of bureaucracy; and since these exchanges were opened, since a fund was created, to sustain people when the slump was on, you have had more unemployment and depression in this country than ever before. Can anybody deny that? Where are Sir William Beveridge and his proposals now? Unemployment is still a canker. But for the war, we should have been in a slump now. Looking at the Foreword of this Paper, it reminds me of a very bad design in stained glass, on which a number of different hands have worked. You never know where the design begins or where it ends, but they think it will look beautiful when the light gets behind it.
What are the suggestions here? It is the same thing again—that we must get ready for the depression. I once asked Sir William Beveridge if he knew what caused a trade depression, and I ask any member of this Government, because what is outlined here is a scheme to circumvent what is called a depression. You have a firewatcher on the roof of industry, and, when he sees a slump coming along, he shouts downstairs, "Get ready, boys, it is coming; why it is coming we don't know, but get ready." It is the same in this Paper. When the slump is coming, what are we to do? Tell the local authorities to spend a lot of money on public works. That is what was done before. Did it help? No. If there is a man who has the audacity to call himself an economist it is his duty to tell statesmen what causes trade slumps and trade cycles. If any Member of this House wants to amuse himself I advise him to get a copy of a book by the editor of the "Economist" called "An Outline on Money. "I never read a more comical book. From beginning to end, the author is just chasing what he thinks are the causes of slumps, but he never catches them.
In this White Paper, we are dealing with effects, not causes. When a depression is heaving into sight, we go back to the old policy and get the local authorities and the State to spend a lot of money. That is the only thing we can do. We cannot remove the slump that is coming because we do not know how it comes. Some think it comes about


providentially. It reminds me of Professor Jevons, who, when asked what caused trade depressions, said they were attributable to spots on the sun. That is about as sound as the stuff in any modem book on economics. What happens when we do a deal of spending? What did Mr. Chamberlain say on 16th February, 1933, on this particular point?
I have tried to make a rough calculation of the sum spent in State-assisted works for the purpose of providing employment and for the development of various activities of local authorities, and I find that from April, 1924, down to September, 1931—that is, about 7½ years—the capital value of works of this kind including housing, was about £700,000,000.
But listen to what follows:
Nearly £100,000,000 a year has been spent, and what effect has it had in reducing unemployment? … at the beginning of the period the unemployed were 1,250,000 and at the end of it they were 2,800,000.
That is despite the expenditure, which had doubled itself. What does the Minister of Labour, who is an innocent in economics, say? He says, "Well, the reason for that is because we began just too late, and the slump had got us by the short hairs before we got a move on." He now suggests, that we have a fire-watcher on the roof to spot when the depression machine is coming, so that he shall have a quicker tip that it is coming. I ask the Chancellor of the Exchequer to be really more serious about this. I have a great regard for the Chancellor, and not because of his nationality. I would ask him not to raise that cry again. He knows as well as I do that there is an end to what can be done under public works expenditure. We cannot go on taxing and rating the community to give work to the unemployed, because the very thing that we are trying to mitigate becomes worse because of the fact that our canons of taxation and rating lay it down that we can only raise these sums of money by levying more taxation upon industry, and if we continue putting burdens of taxation, even if it is to give work to the unemployed, we shall only create more unemployment by this process by which we are raising taxation. I will give way, if the Chancellor cares to reply to that.

The Chancellor of the Exchequer (Sir John Anderson): We make provision in advance, you see.

Mr. MacLaren: What is that? If we are going to be honest, we are going to pay back those sums, and that means

that, at some time or other, industry will have to bear the burden of the taxation. I challenge anyone to deny this—that every penny of taxation we put upon industry tends to create unemployment. I have spoken over my time, but let me make this final point. The hon. Member for Seaham (Mr. Shinwell) gave us a great piece of gyration, but I wish he had given us less heat and more reason with it. He is aspiring to be a great statesman. The Chancellor intervened in the Debate yesterday, and he would have been shocked if I had said "There stands the real cause of unemployment—the Chancellor."

Sir J. Anderson: As an institution?

Mr. MacLaren: He was talking about the necessity for our export trade, referred to by the hon. Member for Seaham. We must have export trade! What are the facts with regard to that? Heaven knows, I would resort to anything if I could remove unemployment. I am not criticising certain proposals in this Paper. They are old-fashioned, but let us see how we can follow these proposals, so that they will mitigate unemployment or remove it. We are the most heavily taxed and rated country in the world. The Chancellor will agree that there is no other nation on the earth in which industry is more heavily taxed and rated than here. What happens when that takes place? Taxation and rates raise prices inevitably. I wish the Chancellor would put some of these phrases in gold letters round the House before he makes a Budget speech.
Then, when we enter into the field of international trade, we find that British products cannot stand in competition against those countries with less taxation than we have. The Chancellor wants to help trade, and particularly export trade, but, as surely as night follows day, when the Budget comes along he will not take a penny off the Income Tax and will not relieve industry of the heavy taxation upon it. Local authorities are at this moment brought to a standstill on housing because of the rates upon houses. These rates also fall upon industry, and rates and taxes, inflating prices, sap our international competitive power. If the Chancellor is serious, I appeal to him, from this point of view, and I do not want his ears to be fuddled with the temptations now being poured into them by the Minister of Production. I am


watching him. I ask the Chancellor in all seriousness to do something, if he can, to remove this dead weight upon our industry. If he is stuck for an alternative way to raise taxes to the present method, I will tell him privately outside. This dead weight of taxation will have to be relieved, one way or another, if industry in this country, both for home and for export, is going to spring forth. He knows that the vast factories of America, with their step-up belt system, are already giving the hint that they have reached the point of saturation, regarding the production of small arms and other things, and are ready to get into peace production.

Mr. A. Bevan: I should be careful about America to-day.

Mr. MacLaren: If we are to face the impact of competition from great equipments of powerful countries like America and Russia it behoves us to see that we are really serious about the export trade, which I believe is vital. We cannot do without an export trade. Thus, we shall have to see how far we can force the hand of the Chancellor in the process of relieving the heavy burdens upon it.
I said in this House a few weeks ago that we speak—and we sometimes forget it—under grave circumstances. As we speak here and enjoy our Debate, a few miles beyond there is a bloody conflict of our own countrymen fighting for freedom. I heard the Minister of Labour saying that the soldiers said to him, "Ernie, are we coming back to the dole?", and he said, "No." I would also ask him, "Ernie, are we coming back to servitude?" I believe, with all the conviction that a human being can possess, that this poverty and unemployment and bad distribution of wealth is the outcome of man's lack of understanding of economic laws, and by that I mean how men should act in conformity with natural law in social relationships in society. Because he lacks that knowledge, man resorts to his petty, human devices, overlooking the fact that Governments, through legislation, have transgressed natural law. He does not want to fail, and so he builds on improvised foundations. Witnessing this, one is incensed with the bitterness and cynicism; at other moments one cannot help caricaturing the situation.
Be that as it may, these men are engaged in this terrible struggle now, and they are not going to tolerate the things they tolerated before. From the last war until the outbreak of this one, they all knew the degradation of unemployment. If there is anything which amazes me it is the way these men recovered after the way they were treated when they were unemployed in the vast cities. Look at them now as soldiers. I am amazed at the way they reacted to a healthy life when I remember how they rotted at our street corners. These men, now revitalised, are not coming back to the life they had before. They are not coming back to unemployment, and, what is more, they are not coming back to be "doled," overlooked and supervised by bureaucrats.
Having in my mind all these things about private and public interests which have anything to do with employment, I put it before this House that, really, we should be in tune with the seriousness of the circumstances of the moment. It is not whether we are making points here, for or against the White Paper. It is how far we are all, as Members of this House, contributing to consolidate public opinion behind us and for us, and doing something to remove the deep rooted causes of unemployment. That evil did not start after this war or before this war, but in those days when someone enclosed acres of land against someone else and said, "This is mine and thou shalt not touch." This is the basic cause of unemployment. We heard the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) handing out his piebald history, and heard about passing from latifundia into industrialism, and about the Elizabethan period, and the necessity of the Poor Law system of 1601—the first Sir William Beveridge Act of that year. The right hon. and gallant Gentleman tried to hide the fact that it was during those periods that people were driven from the land and refused the use of the land.
Our soldiers are worthy not of subterfuges devised by bureaucrats or by scribblers who call themselves economists but of all the wisdom of the best of us in this House, and of consolidated action on the part of this House, in solving the problem on the lines of liberty, which, I believe, can be done. We here should not gather together and conspire to mitigate their


fear while, under the directions of the Minister of Labour, we put them still more into the grip of some appalling system, that would treat them as mere chess-men on the board to be pushed about to suit the industrial system. England is the finest country in the world. She has been sung about by poets. She is the home of liberty; she stands to-day even stronger as a nation, though threatened; as a nation she has shod across the history of man the conception of constitutional government. This House represents the crowning feat and accomplishment of the nation. Let us, therefore, remembering these things, fight for liberty and liberation and the removal of poverty, rather than conspire by these imported Germanic ideas of allowing the cause of poverty to remain, while building more State bureaucratic systems, to mitigate poverty and keep our people in slavery.

Captain Cobb: My hon. Friend the Member for Burslem (Mr. MacLaren) very seldom intervenes in our Debates, and I hope that he will not feel that I am trying to flatter him or have designs on him, if I say that his contributions are always very worth listening to, and to-day's is certainly no exception. I welcome his speech, among other things for the fact that he has blown a breath of fresh air into the rather sickly and adulatory atmosphere which has prevailed here during the last three days. I, personally, have regretted the tendency which so many hon. Members have shown to treat the White Paper as if it was the inspired word of the Almighty. I think that that, to put it at its lowest, is an exaggerated value to attach to it. Many speakers have given the impression that the White Paper is, in fact, the first attempt that any Government has made to deal with unemployment and that impression may be the reason why this Paper has received such a very warm welcome in many quarters. It is a most dangerous thing to give the public the impression that you can cure unemployment, or solve any other problem, merely by writing essays about it. I may be a sceptic but I find it really difficult to believe that, in this imperfect world, you are ever going to reach a state of full employment at all times, any more than that you are going to have a constant state of perfect health. But it is the duty of the Government to see, in co-operation

with industry, that means are devised to avoid long periods of mass unemployment from which we have suffered in so many parts of the country during the years between the wars.
I make no secret of the fact that I am a convinced believer in private enterprise, as opposed to State ownership. No hon. Member, speaking from the benches opposite, has had a good word to say for private enterprise, but it is only fair to ask them, if private enterprise is such an inefficient and unworthy form of activity, why it was private enterprise and private enterprise alone which made us the richest and most powerful country in the world. There was no question of State assistance or Government control in those days. It would be a real national disaster if this Government or any other Government were to embark upon a policy of control and direction of our national industries. The right relationship between Government and industry should be a state of partnership. It would be absurd to say that Government action and Government policy have no effect on prosperity and on employment. Of course they must. The Government's financial and economic policy must always have the greatest possible influence, but it should be possible so to see to it, that industry generally has complete confidence in the Government and can rest assured that that Government looks upon industry as something which assists the industrial life of this country and does not look upon it as merely something to fleece.
I have been alarmed, I must confess, in recent months to find among Ministers on the Government Front Bench an increasingly authoritarian outlook. A little while ago we had a Minister introducing a Bill which would make him, in effect, the sole arbiter of the destinies of the dairy farmers. We have another Minister who, we understand, is about to produce a Bill which will make every doctor in the country a civil servant and every patient a number on a form. These tendencies are definitely in the wrong direction. It is not so many years ago—about 300 years ago—that we had a little trouble in this House over a matter concerned with the divine right of Kings, and the time may not be very far distant when we shall have similar trouble with the theory of the divine right of Ministers.
It is a peculiar thing that the Government of a great Imperial nation like ours


which should have produced a White Paper dealing with employment policy, is able to find room for a mention of the Empire in only about two or three lines on the fifth page. It is true that the Minister of Labour referred to the large potential market which our manufacturers have in the Colonial Empire. The Colonial Development Act, when it was originally passed, was admitted to have among its objects the raising of the standard of living among our Colonial subjects, in order to provide more employment for men in industry here. That is a policy which, I hope, the Government intend to pursue. I am inclined to feel that such financial provision as has been made to achieve this purpose is so far totally inadequate. I should like to see far greater sums provided for in order to raise the standard of life among our Colonial subjects and to increase their purchasing power so that they can become more effective consumers of our manufactured goods.
I would put in this caveat, that if we are to spend large sums of our money to develop our Empire our manufacturers should have the first right to the markets which that increased development will provide. I regret that so little room is found for the Empire in this White Paper on the ground that the Government do not appear to realise that unemployment, as every other matter of importance affecting this country, is not a purely national question. It must, surely, be an Empire question as well. If you have one unit in the Empire which is weak, for one reason or another, it is bound to affect the strength of the Empire as a whole. I should like to see our industrial policy of the future going along the lines of increasing the industrial effectiveness of the whole Empire, rather than of this country alone. All the Dominions, without exception, are conscious of their own weakness, of their small populations, and of their great need for greater industrialisation. I do not think that there can be any question that they are determined to increase their industrialisation, whether we are prepared to co-operate with them or not, and I can envisage a future in which we shall find our own industries competing with very strong overseas competition as the result of a largely increased industrial output in our Empire, and this surely is a matter which can properly be

discussed between our Government and the Dominion Governments.
I have always thought that our emigration policy in the past has been an extremely unattractive one from the point of view of the emigrant. The emigrant leaving this country and going to one of our Dominions leaves behind practically everything to which he attaches importance, his family ties, his environment and his friends and on top of that every form of social insurance. It is not at all surprising therefore that young men have found the prospect of going to the Dominions where they have very largely been wanted is not a particularly attractive one. If we wish to increase the industrial power and strength of the Empire, as a whole, in the future, we should embark upon a policy which would mean exporting our industries to the Dominions along with the people who earn their living in those industries. I do not mean to apply this to one section of the community alone. My idea would be that three or four industries in one large industrial town should endeavour to transport themselves, together with all the communities who live there, so that people making their new homes in these Dominions, would take with them their jobs, their friends, their families and everything to which they have been accustomed. I do not pretend to say that this is a plan which would receive general acceptance, or which is completely foolproof. I am nothing like young enough to speak with complete dogmatism about anything, but I have outlined these proposals to a number of friends, both English friends and friends from the Dominions, and without committing themselves, they have been kind enough to say that they believe this is the sort of idea that might be worth considering. The great advantages of it in the first place would be to de-crowd this country which, in my judgment, is grossly overcrowded; you would add great strength and wealth to the Dominions into which your industries and communities were transferred; and you would give the people who worked in these industries an infinitely better, happier and freer life than they could possibly have here in this overcrowded country.
I am most strongly of the opinion that the main cause, in the years between the wars, of unemployment and financial and industrial instability, has been, above all, the insecure, international out-


look, and this country has contributed to that instability more than any other country in the world by reason of the fact that we, who were looked upon as the mainstay of the League of Nations, deliberately disarmed ourselves so that it was utterly impossible for us to exercise any influence on the foreign policy of other nations. I believe we have learned our lesson now. I believe that the great majority of our own people in this country recognise that if we are to have stability and any kind of security in the years after this war, it is essential that we should become a really effective military Power. That alone would provide a great deal of employment, not only amongst the men serving in our Armed Forces, but among those who continue to provide those Armed Forces with the necessary equipment.
I feel strongly that whatever happens the Government should not make, no matter how many more White Papers and essays on unemployment or on any other subject they may produce, any plans for the future which are based on a state of insecurity of this nation from the military point of view. If they do, we shall find that our house is literally built on sand, and I have the best possible authority for declaring that the house which is built on rock is a very much better and more lasting edifice.

Mr. A. Bevan: I thought, if I may be allowed to say so, that the speech with which the White Paper was introduced to the House by the right hon. Gentleman the Minister of Labour was as good a speech as could be made in defence of a proposition of this sort. In fact, I never thought that so many good things could be found in the White Paper as the right hon. Gentleman succeeded in finding before he sat down. I am bound to confess that I have been astonished in the course of the Debate by the laudatory statements which have been made about this document. I think that when it comes to be examined in more detail, and when its implications are fully realised by the country, not only will there not be praise for it but there is almost certain to be universal condemnation. I hope, before I sit down, to be able to show why that is so. First of all, however, I would like to ask the House to consider for a moment why it is that we have this White Paper at all. Why did the Government find it necessary

to produce this document? I can see, and everybody will realise, that the Government must make some provision for the immediate situation. No one corn-plains about that; indeed, the Government would be neglecting their duty if they did not make provisions and plans for the immediate post-war situation. But why should the Government assume that they should produce a document dealing with the permanent position? And why on earth a Coalition Government should consider it possible to do so, I cannot understand.
The subjects dealt with by the White Paper represent all the matters which distinguish that side of the House from this. The questions of how the work of society is to be organised, how the income of society is to be distributed, to what extent the State is to intervene in the direction of economic affairs—all these are questions which first called this party into existence. They represent in themselves the main bone of contention between the main parties of the State. How on earth, therefore, can a Coalition Government pretend to approach those problems without the gravest sacrifice of principles? It is an impracticable proposition. Indeed, I will go so far as to say that if the implications of the White Paper are sound, there is no longer any justification for this party existing at all. We think that we represent a fundamental body of doctrine which is conducive to the welfare of the State, and which subsequently the State will have to adopt if it is to be saved. Therefore, I do not see for the life of me—and I am putting a serious proposition to the House—how a Coalition Government can pretend to be able to examine a situation of this sort and put an intelligible series of propositions to the House.
Speaking, I hope, with some restraint but with my usual frankness, I am bound to say that in attempting to do this I believe the Coalition Government has gone outside its terms of reference—it has exceeded its mandate. It was called into existence for the purpose of fighting the war to a successful conclusion, and, as I said earlier, it must necessarily deal with the first-aid work of the immediate postwar situation. But the policy we are now discussing is a post-election policy; it can never be operated until after a General Election. Indeed, the White Paper anticipates it, because the White Paper says


that the main problems with which the permanent part of the scheme proposes to deal will not arise for some years. Long before that a General Election will be held, and I imagine that the subject-matter of that General Election is going to be the main bone of contention between the two parties. If that be the case, then why have we the document at all? What is behind it? I do not want to find any sinister purpose, but some reason should be given why a Government like this Government should bring before the House of Commons highly contentious arguments and do it gratuitously. I should have thought the Government would seek to avoid these matters. In spite of that, they have plunged the House of Commons and plunged our party into a serious discussion entirely unnecessarily, because this discussion will continue after this Debate is over; indeed, this is only a preliminary skirmish, and we are bound to examine all the implications of it.
My right hon. Friend the Minister of Labour told us that this document does not pretend to deal with whether industry should be State-owned or privately-owned. I understand from that that he believes that even under private ownership unemployment can be prevented by the application of these remedies. If a progressive society and an expanding standard of life can be achieved by this document and unemployment can be avoided, then there is no justification for public ownership and there is no argument for it. Nobody believes in public ownership for its own sake. This party did not come into existence demanding Socialism, demanding the State ownership of property, simply because there was some special merit in it. This party believe in the public ownership of industry because we think that only in that way can society be intelligently and progressively organised. If private enterprise can deliver all these goods, there will not be any argument for Socialism and no reason for it. My hon. Friends on the other side of the House know full well that that is so, and they will go to the hustings at the next election and will say that the Labour Ministers have stated in the House of Commons their belief that by the application of this doctrine all the worst evils of society can be not only mitigated but prevented. If that be the case, what is our argument going to be? We shall find

the argument all right, but I do not want only to find arguments, I want to find international integrity behind the arguments too, and if I believed this document, if I thought its aims would be achieved, I would join my hon. Friends opposite——

Sir H. Williams: Go with the pinks.

Mr. Bevan: —I would join the Tory reformers who have welcomed this document with as much enthusiasm as the Minister himself. Let me ask the House to look at the main contentions here. First, no one, as far as I know, has called attention to the Foreword, and the Foreword is the most interesting part of the whole thing. It is assumed that in the period immediately following the war there will be no problem of unemployment. Why? We are told because the immediate post-war period will be a time of shortages. That is an astonishing argument. The people in my constituency suffer from shortages all the time. If shortages cured unemployment, unemployment would never have occurred. The argument that after the war there will be no unemployment because there will be shortages is a stupid argument and it ought not to have been put into a State document. The reason why there will be no unemployment after the war is not shortages but because the over-riding necessity of making good the damage caused by war will be a social aim to which the State will subordinate private interest, for which it will give priority and because of which it will direct expenditure. It is rationing priorities and directing spending which will prevent unemployment immediately after the war, because the State will say, "We must first of all build enough houses." It will say, "We must first of all replenish our industries." It will say in a vast number of directions that definite claims must be admitted for priority in the distribution of materials and natural resources. In other words, unemployment immediately after the war will be prevented by just that interference which hon. Members resent.

Mr. Hammersley: Is it not a fact that immediately after the war there will be an unsatisfied effective demand? It is the lack of effectiveness.

Mr. Bevan: The Chancellor of the Exchequer will tell the House that people will not be allowed to release that effec-


tive demand when they like. We cannot release all that spending power immediately after the war. We shall have to ration it. He will tell hon. Members that in fact a lot of people will be either made or requested to avoid spending on certain things, because we cannot immediately after the war let loose all that spending power and get priorities properly carried out.

Mr. Driberg: The savings campaign will go on.

Mr. Bevan: Exactly. We cannot have people being permitted to buy as many Rolls-Royce cars as they like when there is a crying need for houses to be built, so in fact the immediate post-war problem of unemployment will be solved precisely because of the social aid that the right hon. Gentleman spoke about on Wednesday. I agree that it will also be helped by the fact that people will have money in their pockets and, to the extent that they are allowed to spend it, it will become effective. The White Paper puts it in precise terms. It says:
Assume a good level of wages and prices and full mobility of labour, workers will lose or fail to find employment because there is not a sufficiently large expenditure on the goods and services which they might produce.
In other words the members of the Tory Reform Committee say that the system which they support distributes the national income so inequitably that unemployment is inevitable, that in normal times workers fail to secure a level of wages high enough to keep themselves in employment.

Mr. Hammersley: They say nothing of the kind. What they say is that there is a rise and fall, or a boom and a slump, which has previously been considered to be the natural system. This White Paper says it is proposed to iron it out.

Mr. Bevan: No one on this side has said that booms and slumps are natural visitations. The hon. Member must not run away from the language of the White Paper, because it is precise. It says that spending power does not keep pace with production and a point is reached when the failure of spending power may bring about a slump. If it does not say that it says nothing. That time arises because, normally, enough spending power is not distributed in the form of wages and salaries. So hon. Members must not have it all their own way. The White Paper not only admits that unemployment super-

venes on every period of economic expansion but it insists that unemployment shall occur. It not only prophesies it, it demands it. In the Appendix they speak about a social service contribution of 5s. and suggest that, when a slump is impending, that 5s. should be reduced. If the slump has been caused in the first place by the failure of spending power, why take 5s. from the workers at all, because obviously it is not being able to spend the 5s. which causes the slump? That is an argument for having social services without contributions. The Minister of Labour recognised it perfectly frankly on Wednesday, because the most interesting part of his speech was the part that he did not develop. It was a perfectly frank representation that as productivity decreased some means must be found for stepping up wage rates in order to buy back the increased productivity of expansion. That is the one sane thing in the whole business, but the right hon. Gentleman does not tell us how it is going to be done. Do the members of the Tory Reform Committee accept that too? Obviously this is the heart of the whole matter. If the economic system in its normal functioning fails to distribute sufficient spending power to keep it working, obviously what you need to do is not to have the heroic measures suggested by the White Paper but some device by which spending power normally expands with the expansion of production.

Mr. Loftus: If the hon. Member assumes, as the White Paper does, a stable level of prices, it is obvious that, as production steadily rises year by year, there must be a steady rise in purchasing power.

Mr. Bevan: I assume stable prices, we are assuming normal stable conditions. The Minister frankly told the House, as did the Chancellor, that they had in mind, because they are logically minded people, that it would be necessary to expand the purchasing power of working class people pari passu with the expansion of production. I want to know whether members of the Conservative Party accept that in normal wage negotiations the result is so unjust to the workers that some method must be found of supplementing the worker's power to increase his wages. I know they do not want that. Indeed, I do not think private enterprise could work in such a manner. If, every


time an increased profit is made by private industry, it has to go back at once in the form of increased wages, the employer will not go on. He is only there in the first place to make higher profits. If the social system can only be kept going by forcing him to pay away his profits in increased wages, the normal incentives have gone. Now it is admitted that that goes or unemployment comes.
What do the Government suggest? This is the scheme which the members of the Tory Reform Committee suggest is the alternative to Socialist regimentation. It is that very system which produces all these evils and when you see them happening, the steel worker is thrown out of work. When the demand for coal fails, the miners are unemployed. The Minister says, "We will start a public works scheme." The collier, the steelworker and the building worker are forcibly and at once taken away by the State from their normal occupations and put in labour camps. The White Paper says that the problem must be handled quickly at the very beginning, because after four months the unemployment figure can go up to a million, so it is necessary to assume power to take workers away at once from their normal occupations when they become unemployed and push them into some work—building bridges, making roads, planting trees or building houses which ought to have been built before. The right hon. Gentleman and his friends behind him are suggesting the worst form of regimentation for the workers as a means of dealing with a slump which has already been caused by the unjust distribution of the national income.
The workers will not have it. What working class people want is to remain in their jobs all the time and to be able to look forward to a better time for themselves and their families in their own homes, in their own villages and towns and, as society becomes more prosperous, to their hours of leisure being increased and their material rewards being increased where they live and where they work. What they do not want is this thermostatic operation to occur every five or six years by which they are taken forcibly away from their normal occupations and put to do some job of public works in order to pump spending power into the system which has caused unem-

ployment. It seems to me that the White Paper makes the final admission of the bankruptcy of a system that hon. Members opposite are attempting to defend.
I suggest that the best part of the White Paper was written by some young Treasury official. A good deal of it we are asked to welcome because it makes certain admissions. I have heard this sort of thing on Socialist platforms ever since I was a boy. The great British Treasury has caught up with the soap-box orator of Hyde Park. That is all that the White Paper is. Every worker knows that the reason he is idle is because he has not enough money to buy things. A great Treasury official has found that out and the House of Commons is asked to say what a wonderful people we are. We have at last caught up with the ordinary soap-box speaker. We are told that another great discovery is that we are to turn our backs on orthodox finance and that in future an unbalanced Budget is to be one of the instruments for prosperity. We have not balanced our Budget since 1936. We gave power to the Government to borrow £1,000,000,000 in 1936, and we have not balanced our Budget since. Nor will it ever be balanced again. America has not balanced its Budget ever since President Roosevelt took office. Italy and Germany never had a balanced Budget. There has not been one in the world for years and yet we are asked to regard it as a wonderful discovery. I have never seen such poppycock in a State document, and we are gravely asked to consider it as a wonderful achievement.
We are told that the State admits at last its responsibility for providing work. We are asked to be breathless with admiration at that great advance. No Government would live for a minute after the war that did not admit it. Do you think that the young men and women who come back from the war would listen to a lot of doddering old gentlemen saying that the Government would have no responsibility whether they worked or not? That is an admission about which we are supposed to be enthusiastic. The fact of the matter is that the White Paper is shallow, empty and superficial and bears all the stigmata of its Coalition origin. It runs away from every major social problem. It takes refuge in tricks, strategies and devices because it has not the honesty to face up to the implications of the social problems involved.

Sir Herbert Williams: I do not often agree with my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan). I do not agree with his objectives, but I entirely agree with his concluding words. This is a miserable document. In 1921, when I was prospective Conservative candidate for Wednesbury, my opponent, who was the sitting Member, the late Mr. Alfred Short, had a big gun to speak for him. The big gun said something like this: "I hear you have a Tory candidate here who makes speeches at the street corner about the Bank rate. What has the Bank rate to do with the working man?" That big gun is now the Minister of Labour and National Service. It is no good the right hon. Gentleman saying he did not say it, for I have it in my Press-cutting book, and I have waited nearly ten years, until he made a speech in which he acknowledged the importance of the bank rate in order to quote it in a letter I then wrote to the Wednesbury paper. He has made some progress since then, for he has discovered that there is such a thing as the bank rate.

The Minister of Labour (Mr. Ernest Bevin): Perhaps my hon. Friend will allow me to say that I was the one member of the Macmillan Committee who recommended going off the Gold Standard.

Sir H. Williams: The Macmillan Committee sat in 1929, which was eight years after the right hon. Gentleman's historic speech to which I have referred. We now have this extraordinary document. I do not know who picks the orators for the Government in these Debates, whether it is the Prime Minister or the War Cabinet, but who has been selected for this Debate? It is a strange trio, consisting of the Minister of Labour, the Chancellor of the Exchequer and the Minister of Production. None of these three has ever been engaged in productive industry. The Minister of Labour has had a lot to do with transport and other workers; the Chancellor of the Exchequer is a retired civil servant; the Minister of Production was a trader in an international commodity which has no design about it. None of them has ever had any practical experience in the conduct of competitive industry in the real sense and they are all political amateurs. We never saw any of them in this House till six years ago, and they are not com-

petent to state a case in the House. The Minister of Labour read his speech—another White Paper prepared by a civil servant. The Chancellor of the Exchequer read his speech, another essay, a second White Paper by a civil servant; and I am going to bet that the Minister of Production will read his speech. I hope he will for his own sake after the trouble he has recently been in about a public speech, for he is no longer to be trusted to say anything for himself.
The White Paper was prepared with the assistance of a professor of Aberystwyth who is chief economics adviser to "The Times," and who wrote his customary leading article on the day the White Paper appeared. Outside Downing Street that day, the Minister for Reproduction or Reconstruction—I am not certain which—Lord Woolton, met the Minister of Labour and, imitating Grimes, said, "All my own work." In a few months' time they will be denying paternity. I have had the privilege of knowing, slightly or well, eleven gentlemen who have held the office of Chanceellor of the Exchequer. Every one of them, when holding that office, would have said that this document is undiluted nonsense. This rather meagre team called His Majesty's Government, the least intellectual of any Government in the memory of any living person—even the Labour Government of 1929–31 was better—suddenly come forward with a new light which great wise ones of the past have never seen. The thing is monstrous. Yesterday we had the monstrous impertinence contained in a remark by the Chancellor of the Exchequer. I tried to intervene but Mr. Speaker would not allow me. An hon. Member asked "What is the change of outlook?" The Chancellor replied:
It is an acceptance on the part of the Government of responsibility for a positive policy in this matter."—[OFFICIAL REPORT, 22nd June, 1944; Vol. 431, c. 409.]
The impudence of saying that they, for the first time in the history of Governments, have responsibility for the matter of unemployment! That could only be said by amateurs who have just come into politics. If they had been here with me in the years from 1924, when we had Debates on the ceaseless problem of unemployment, they would not have said it. There is always this danger of bringing amateurs into politics. The Chancellor of the Exchequer said, in order to please


his Socialist colleagues, that certain enterprises should not be conducted for private gain. Why not? What is the objection to private gain, if it is the result of the higher efficiency that you get from private enterprise? Is the telegraph system an example of enterprise that is carried on publicly? It was nationalised in 1869, and started making a loss in 1871, and has made a loss ever since. Is the telephone an example? The cost of a telephone call to-day is twice what it was in 1914. The price of the electricity which illuminates us is one half. The one system is run by the State and the other is run partly by private enterprise and partly by the municipalities. Is the Post Office an example, when it charges me 150 per cent. more for conveying a letter than it did in 1914?

Mr. Hugh Lawson: Will the hon. Gentleman say what the price of conveying a letter was when the post was a privately-run concern?

Sir H. Williams: For reasons I do not understand the post has never been a private concern in this or any other country, so that I cannot answer the question. The telephone service in the United States, which is far more extensive than it is here, is run by private enterprise. It is so expensive in this country that no workman has got it in his house.

Mr. A. Bevan: That is because his wages are low, just as much as because the cost of telephones is high.

Sir H. Williams: But he can afford electricity. The Chancellor of the Exchequer told us yesterday that the Government are to set up a statistical department which will consist of statisticians who are to tell the Government when they are to do anything. It would surely be better to bring them into the Government so that they could act more quickly. We know how long it takes a Minister to act after information has reached him. What a spineless thing the Government is! I presume that they have read this document. I am certain that they do not understand it. The Chancellor said yesterday, "This is based on unbalanced Budgets, but we are nevertheless going to have sound finance." I can only assume that the Chancellor has not read the document.
Then look at the Motion before the House. It does not welcome the White Paper. The Government had not the courage to ask the House to vote for it. It only welcomes
the declaration of His Majesty's Government accepting as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war.
Why have not the Government the moral courage to vote in favour of their miserable document? I have never known anything so cowardly and spineless in my life. How can we respect people who are not even willing to vote for their own proposals?
They think this White Paper is original. Listen: Some 25 years ago, two gentlemen, named Douglas and Drage, wrote a book. It was called "Credit Power and Democracy." I think I am quoting the title aright. I read it. I found that it contained a complete intellectual delusion. It was one of those productions of which one can say precisely with truth that it is 100 per cent. wrong. Nevertheless, it had a great vogue. All the half-baked wits of the Labour Party used to study it and go to lectures on it. Ultimately, some of the brighter brains of Eccleston Square realised that it was really nonsense, so the Labour Party condemned it, and its circulation went down.
Then, Sir Oswald Mosley, who has had many vicissitudes, was elected Labour M.P. for Smethwick, in 1928. Apparently he bought the surplus copies of this book. In November, 1928, he made a speech in the course of the Debate on the Address. You have only to reproduce the speech of Sir Oswald Mosley in November, 1928, and you have this White Paper, so I am not in the least surprised that a Government and a Minister who used to hold Sir Oswald in durance vile, could not welcome a paper in favour of Sir Oswald Mosley's policy. I had the great pleasure of replying to Sir Oswald Mosley's speech on that occasion. I was a junior Minister, and for some reason I was to have a chance. I made then the speech which in part I am reproducing to-day.
In March, 1929, the right hon. Gentleman who is Member for Carnarvon Boroughs (Mr. Lloyd George) brought out a pamphlet called: "We Can Conquer Unemployment." It contained many of the funnyosities that we find in this White


Paper and nothing original. When he had written it, the Conservative Government set to work all their Departments, and each Department denounced its own departmental aspect of the pamphlet, without troubling very much about the general theory. We had a General Election, and the right hon. Member for Carnarvon Boroughs put up enough Liberal candidates to split the vote and so defeat many Conservative candidates. I was one of the unfortunate ones. The Labour Government took office. Having spent most of the election denouncing the programme of the right hon. Gentleman, the new Government proceeded to adopt it, with the assistance of the late George Lansbury, Mr. J. H. Thomas and Sir Oswald Mosley. They were the team—very admirably selected. Having denounced the programme of the right hon. Member for Carnarvon Boroughs they proceeded to adopt as much of it as they could. They went on doing that for two years. They succeeded in producing a first-class crisis, and in raising unemployment from the low level when they started of something under a million to the much higher level of about 2,500,000. That was the result of giving effect to these proposals. [HON. MEMBERS: "No."] Yes. It is no good going in for public works, which have the inevitable effect of increasing imports at a time when exports are restricted. [An HON. MEMBER: "The Prime Minister agreed with it."] No matter what he said, he never did know much about economics. Do not throw the Prime Minister at me. He has stood on every platform there is. Give me argument, and not names.
Then there was the election of 1931, in which all political parties said that it was vital to balance the Budget. The only difference between Conservatives and the two sections of the Liberal Party on the one hand and the Labour Party on the other was that the Labour Party were not prepared to go quite so far in the sacrifices involved in balancing the Budget. But they were unanimous as to the essential necessity of balancing the Budget and so were all political parties, without exception. Where are we? Was everything that the Labour Party said in 1931 untrue? Surely I am not going to be asked to think that everything they said in 1931 was untrue, and that they have suddenly seen a great light because Hitler has sent over a few bombless pilots or pilotless

bombs. Is that where their light has come from?
It is always difficult to talk about the President of the United States because he is not only Prime Minister but monarch as well. He is head of the State and head of the Executive, and it is improper in this House to make adverse comments on the heads of States. I would therefore refer to him as the head of the Administration of the United States and not as President Roosevelt. In 1934, the United States commenced the policy of the White Paper. There is nothing novel about it. For five years they deliberately "primed the pump." That was the phrase. This White Paper is only pump priming. Under the New Deal, tens of thousands of millions of dollars were spent, and they even paid people for not raising hogs. Every kind of economic folly in the form of this White Paper was committed by the United States. At the end of the period they had 7,500,000 out of work—a stable and high level of unemployment.
As a second stage from Major Douglas, there was a gentleman named Aberhardt, at a time when there was too much unemployment in Alberta and everybody was very hard-up. He said that it was a splendid idea to rob everybody of half the interest to which they were entitled. That was the first effect of social credit. They got a lot of people to sign an undertaking that they would take half their interest in full satisfaction. That was social credit, but it was neither very social nor very creditable. In Germany they had a republic called the Weimar Republic. They took advantage of the French occupation of the Ruhr Valley to get rid of their internal debt, and they inflated to destruction.
This policy of unbalancing Budgets is the policy of inflation, quite definitely inflation. People think it was the restoration of the Gold Standard that brought about the collapse in 1920, or rather that unwise deflation which preceded the restoration of the Gold Standard. If people will read their economic history they will find that the cloud which first showed itself markedly here in the autumn of 1920, showed its first trembling signs in the summer of 1920 in the United States, and that it was substantially a consumers' strike against high prices.

Mr. Montague: So it was not due to the Labour Party's policy?

Sir H. Williams: No, the Labour Party had not been in office then. The hon. Gentleman must have been asleep. He thinks I am talking about 1929, but I am talking about 1920. It was a different slump. In 1920, irritation against high prices led to what was, in fact, a consumers' strike. We must not think we can pump purchasing power into a community; we cannot, at a time when people are afraid, and will not use it. It is a state of mind which creates a state of trade and a sense of confidence. There is no sign of a recognition of that principle in this White Paper.
The Chancellor of the Exchequer said yesterday, "Of course, this involves continuity of policy." That presumably means that in future elections what we shall say does not matter and that this mysterious new hierarchy of scientific, statistical civil servants are to run the policy while the electors are cut out. Is that not driving into Fascism as far as we can? This document contains the dreadful policy of industrial conscription and the direction of labour which has not been commented upon by anybody, but which will kill it stone dead. The people who usually write about direction of labour have never been directed. Give me the power to direct this strange collection of people on the Government Front Bench to the job for which I think they are suitable. They would soon change their views.
The Chancellor goes on to say that in future we shall go in for bulk purchase. It is a strange doctrine. The Ministry of Food buys in bulk to-day, and there may be a case for doing so in war time, but we have not the faintest idea whether it is efficient. We do not know whether the Ministry are buying economically. All we know is that the Ministry have succeeded in getting sufficient food for the rations. We have no knowledge of the financial results of their transactions. There were some deplorable results from the bulk purchase transactions of the last war, as we found out when we knew the facts later on. The Government will go in for bulk purchase; from whom? From Governments? Are these transactions to be from Government to Government, and is every trading transaction to become a diplomatic issue? We are driving into war as fast as we can go if trading transactions are to be bulk pur-

chases between Governments. The Chancellor of the Exchequer has no political affiliations, although he calls himself "National." He seems to be neither fish, flesh, fowl, nor good red herring, and I do not know whether he has ever made a declaration on the point. He is non-party, which means that he has not made up his mind on matters. These will be bulk purchases only over the dead bodies of some of us. The right hon. Gentleman the Minister of Production knows something about this business and I hope that we shall be able to get a little more information.
Now we come to the unbalancing of Budgets. In one sense no Budget can be unbalanced because what you do not raise by taxation you have to borrow. From whom? Suppose people are reluctant to lend? Suppose there is a discreditable Government who say that in order to restore a bad state of trade they are going to unbalance their Budget and to borrow? The public may not lend, and in that they may be very wise. The quickest way to get a Government out of existence would be for people to refuse them resources.

Commander King-Hall: They would have a "Salute the politician" Week.

Sir H. Williams: Certainly. There is no compulsion on the great mass of the people to lend money to the Government. After all, lending is an individual act, in which hundreds of thousands or millions of people take part, but if they think that a Government are not credit-worthy, they will not lend. Why should they? What could the Government do? They would be forced to go to the credit-creating institution, the banking system or the note issue, in order to finance themselves temporarily.
Why has the Bank of England remained a semi-private-public institution? Why is it that in most countries of the world the central bank is not a State bank? Because it has been realised in every country that it would be an incredible danger if politicians were in a position to use its credit-creating power. It is because Governments in difficulties should not have this dangerous power to create credit that in almost every country an effort has been made to keep the credit-creating institution separate from the State, on the ground that the State is not trustworthy


—or at any rate the politicians, if not the State. Some politicians when temporarily in office may not be trustworthy when in difficulties. People have realised that in every country.
The White Paper policy is an inflation policy, and inflation is the worst form of industrial protection. If you inflate your currency, it means that everything you export appears to be cheaper, but that effect is transitory. It is a depreciating currency and not a depreciated currency which produces that effect, which is temporary and passes away. Prices ultimately adapt themselves to the rate of exchange. I have always been a keen Protectionist, because Protection is discriminating. Protectionists say: "We will stop the importation into this country of those things which disturb our own international balance of production, and we will encourage the things which we cannot produce, or cannot produce efficiently." That is not the method of inflation. If you inflate, say 20 per cent. you put a flat 20 per cent. duty on all imports irrespective of their type. Did hon. Members ever hear anything so un-intellectually stupid in their lives as this White Paper? But there we are.
Naturally, our policy cannot be dictated by foreign nations. That would be quite intolerable, but unfortunately we cannot divorce our internal economy from our external policy. There is a school of thought which thinks that things inside the country can be run while completely ignoring things that happen outside. That is nonsense. Let me read this quotation from the "New York Times" of 29th May, 1944. Broadly speaking the American Press is local. They have no national Press such as we have. The "New York Times," however, is regarded as one of their best newspapers. This is what they say:
We do not need to examine here the wisdom of the British White Paper proposals. It is sufficient to point out that they imply a policy of cheap money, currency expansion and deficit spending"—
I think that is a fair comment—
all of which must endanger any previously established parity for the British pound sterling. If there was no proposal for an international monetary fund, supported by the Treasuries of other countries this might merely be dismissed as a matter for the British alone to settle. But the proposed 8,000,000,000 dollars fund raises the question of whether

other nations can be expected to underwrite such plans and in effect to support such domestic policies.
Here is the "New York Times," a paper as sympathetic to the British point of view as any American paper, pointing out that this collection of economic experts called His Majesty's Government are not entitled to produce policies which can only succeed if people in other countries will provide them with the wherewithal. We are living on charity at the moment—Lend-Lease, handsome gifts from Canada—which enables us to do all sorts of things which would normally be impossible, and this White Paper is based on the assumption that foreign outlay will make it possible indefinitely to finance these schemes.
I think I have made it reasonably clear I am not a supporter of the White Paper. [An HON. MEMBER: "Or the Government."] That White Paper will remain in print long after this Government's term of office. It has some measure of permanency, even though this White Paper in due course will find the same destination as other White Papers. There is in London a lovely machine into which you put White Papers and the result is tissue paper. How any Government of presumed intelligent persons could have produced this unadulterated nonsense, passes my comprehension.

Mr. Quintin Hogg: After three days of assiduous harvesting a little square of corn still remains untouched in the middle of this field, and out of this little square of corn, the hares are beginning to run. The third and most insignificant hare will, I hope, at least provide some entertainment for the farmers, and will perhaps bring upon himself the opinion that, although they may all run in different directions, they are still all hares. Nevertheless I trust that I shall bring some reason to bear upon the two extraordinarily brilliant and mutually destructive speeches made on the same side of the House, to which we have just listened. The hon. Gentleman the Member for South Croydon (Sir H. Williams) reminds me of a pilotless aircraft. He has a distinctive note of his own.

Sir H. Williams: I know where I am going.

Mr. Hogg: He has a considerable harassing effect, and the blast and noise are terrific, but inasmuch as he is


entirely mistaken as to his direction, he goes off in unexpected places, and at the wrong time.

Sir H. Williams: I think the hon. Member is wrong. I know where I am going, but this curious bomb is directed by somebody else, like all the "Yes men" in the House.

Mr. Hogg: I suppose that if a pilotless bomb could answer a criticism of its own unpremeditated activity, it might claim to know where it is going, too. I know where the hon. Member for South Croydon is going, and I know where the hon. Member for Ebbw Vale (Mr. Bevan) is going. Extremists always find things rather easy in Debate. Parliamentary life lends itself to the party system. The party system inevitably faces one with a dilemma. We are apt to forget that, although the party system imposes a sort of dilemma upon us, the real trend of public opinion is continuous, and the only wise policy is one of moderation and not extremism. The long trail of history is bleached white with the bones of free societies which have lost their freedom. In every single case the cause of their loss of freedom has been that, on one side or the other, the extremist has got control, and the defender of moderation has been defeated in Debate.

Mr. A. Bevan: Would the hon. Member have said that about the fathers of the American Republic?

Mr. Hogg: I am glad to think that the fathers of the American Republic founded an institution which is still alive, and which I believe will continue alive for many generations. It would not be difficult, either on the Continent of Europe, or in modern or past history, to provide, in a larger space than I propose to occupy, ample illustrations to support my argument. The fact is that difficult as a moderate policy may be, difficult as a policy of compromise may be, in the end that is the true political wisdom. Of course the extremists on both sides tend to deride such a theory, and a person who believes in moderation and compromise is attacked by his own side as well as by the other, on the ground—on the other side—of being insincere, and on his own side, with the accusation that he deserts his party policy. I believe that although it would not be difficult

to compose either a panegyric or a lampoon on the great parties of this State, the truth is that our country could have done without none of them.
We are discussing a document which is concerned with the master problem in our domestic policy. There is of course no harm in hilarity in dealing with such a subject, but let us not forget it is also a very serious one. If we could cure this affliction of the industrial system, we should, in fact, find that all our other domestic problems would fall each into its place. Mr. Seebohm Rowntree, in a book which I trust many hon. Members have read, shows that at least one quarter of the poverty of this country in 1936 was directly due to unemployment. In point of fact the argument goes very much further. Another one-third was due to insufficient wages when employed, and another 15 per cent. was due to the poverty attendant upon old age. If only the evil of unemployment could be eradicated, the effect would be such a rise in wages throughout the country that not merely would poverty be eliminated, but social insurance would be relatively easy to administer in perspective, and the housing and health of this country would be better, perhaps, than that which any civilised country has known.

Mr. A. Bevan: But the hon. Member's contention is supported by no evidence. All the documents of the I.L.O. went to show that, in the expansionist period between the war, wages went up by 12 per cent, and production went up by 32 per cent. In fact, wages always fail to keep pace, in those circumstances, with expanding production.

Mr. Hogg: During the period to which the hon. Member refers we had not cured unemployment. The point I was making was simply this: If we could cure this disease, then the wages would rise in exactly the way in which I say. Of course, in discussing a policy of this kind, we must necessarily make an act of faith. It is true that the problem has never yet been dealt with effectively. Hon. Members opposite who believe in Socialism seem to me to make a pretty good act of faith. Hon. Members who believe in untrammelled private enterprise make an even greater one. But a policy of moderation seems to me that which offers the best hope of success for the future. Extremists on both sides, of course, as usual,


play into one another's hands. At the beginning of this Debate the hon. Member for West Fife (Mr. Gallacher) posed a question to this side of the House. He said: "Is it not the case that you will never be prepared to abandon your private enterprise, in order to secure full employment?" He was followed by an extremist on this side, who said, "I accept your dilemma but I prefer private enterprise to full employment." But I am one of those who believe in the policy of the White Paper, because I think it is possible and necessary to reconcile these two divergent principles. All policies are compromises. There is no such thing as absolute freedom or absolute tyranny. Human government is, in its very nature, compulsive and operates through the coercion of a few in the interests of all. The question is not whether we ought to adopt one principle to the exclusion of the other, but in what proportion we shall mix the various ingredients which are necessary.
I believe it to be demonstrated beyond all cavil that the evil of unemployment is an evil, ultimately, of will rather than of economic difficulty. There exists in the world to-day no great society which has not, when it chose to do so, cured the unemployment with which it had been previously afflicted. The question is what you have to pay in order to cure it. Germany cured it at the price of preparing for war, financing it out of the proceeds of intended war. Russia cured it at the price of a certain loss of liberty, and perhaps another price as well. We, in our turn, have cured it in the face of an external enemy [AN HON. MEMBER: "By war."]. The question is whether we can do so in peace-time and at what price. Hon. Members say, "If you do it you will have to abandon your entire structure of individual personal freedom." But why? Russia, Germany and wartime Britain afford no reason whatever for saying that. Russia and Germany were carrying on their Government after a successful revolution, and whatever the advantages or disadvantages of revolution it involves a good deal of political interference, quite independently of economic policy. We in time of war have achieved not full employment but over employment, a situation in which people who, ordinarily, ought not to be compelled to work have to do so, and in

which an insufficient amount of leisure is enjoyed by all. If we deliberately intend to cure unemployment by methods which may now be said to be proved and tried we can hope to do so at a cost far less than that apprehended by some hon. Members on this side, because the level of employment we seek to obtain is not over employment but adequate employment, with adequate leisure and adequate freedom for all. It seems to me that therein lies the fallacy of the political criticisms to which this document has been subjected.
Hon. Members opposite say, "You will have to abandon your system of private enterprise and the ownership of property." That would be a very high price to pay for full employment. I do not see that they have made out even an approximate case for such a contention. We have at the moment cured unemployment, and under a system which does admit of private enterprise and private ownership of property. If Members had examined the Appendix at the end of the White Paper they would have seen clearly demonstrated that unemployment in our own country had nothing whatever to do with the system of private enterprise or ownership to which they object. They would have seen a sudden rise after the last war and that the distribution of unemployment had a direct relationship to those trades which were dependent on exports; they would have seen that instead of seeking refuge in the nostrums of the party they have only just discovered after approaching middle age, international trade and renewed export trade partially cured all that structural unemployment which was our worst trouble at that time.
I do not want to overstay my welcome—the little hare will soon escape into the bushes—but I want to say this: My right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot) spoke of us as a small nation which must make its act of faith. So we are, but if there is anything certain in the history of mankind it is that that Providence which directs the hand of humanity does not pay special regard to the importance of size, magnitude or wealth. Our nation may be small, but already we have achieved enough to stand in history with Greece, Rome or Judea. If we have the spirit which is necessary to overcome our prob-


lems by determination and concerted effort, such as we find in this document, I have no doubt that our future will be worthy of our task.

Sir H. Williams: Would my hon. Friend now kindly say one word in support of the White Paper?

Mr. Ballenger: I do not doubt the intentions of hon. Members opposite, because I believe that they are as desirous of removing unemployment as we are on this side of the House, but I have been wondering as I have been listening to some of the speeches from that quarter, just as I have wondered when I have listened to some of their speeches during the past eight or nine years, why they were not converted to this point of view a few years earlier. They must have known that there was unemployment then and——

Major Thorneycroft: We have been urging a policy comparable to this White Paper policy for the last year, and if the hon. Member has missed it, it is not my fault.

Mr. Bellenger: I agree, but I am asking why it was not urged many years before that. Why did not the hon. and gallant Member, or those associated with him, urge it when we had an economic blizzard in 1931?

Major Thorneycroft: I was at school in 1931.

Mr. Ballenger: But I take it that my hon. and gallant Friend is not entirely the Tory Reform Committee. He is associated with older Members of Parliament than himself, and I ask Tory reformers or Conservatives, who are mainly backing this document, Why this death-bed conversion? I will tell them the answer. It is that, just the same as when the Minister of Labour was asked a question by the soldiers going overseas; they realise that those men are coming back one day, and that they will make demands. What are they offering them? They are offering them somewhat similar things to what my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) offered to the men of my generation when we were going overseas—for instance, a land fit for heroes to live in. If this White Paper, which I am prepared to

examine with impartiality, is all that it is intended, the answer that the right hon. Gentleman the Minister of Labour gave to the soldiers of the 50th Division, I think it was, going overseas, is not sufficient. Those men are sceptical; those men are very cynical. That may be why so many have not registered for their vote. Many of them have ceased to believe in politicians' promises.
I ask the House to examine this White Paper, not in any party spirit—although I believe that the solution of unemployment lies in the party system, and will not be attempted until we get back to the party system. My hon. Friend talks about compromise. I am willing to compromise in many things. I have never been a Marxist. I examine these things from a human point of view, because more Members on this side have known the delights of unemployment than Members on the other side—at least, of unpaid unemployment. A number of Members opposite have been unemployed, but they have been comfortably paid. Therefore, this is a matter which we understand, not only from our heads but from our hearts. I disagree in one respect with my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan)—quite often I agree with him, as he knows. I do not think that the Coalition Government have exceeded their mandate in examining this question of unemployment. I do not criticise them at all for dealing with it. It may be an election manifesto, but this White Paper is a very bad election manifesto, and certainly not one which I shall wave around in my constituency as a solution to unemployment. I want something better than this, but I am prepared to examine it without prejudice.
I want to examine it as a military commander examines the objective he is about to attack. Our men and their commanders are engaged in attacking the fortress of Europe, which was supposed to be impregnable. Before they attempt to attack any objective they prepare what are known as operation orders. Military operation orders are always set to one formula. Anyone who has had any staff training will know that the first paragraph of the operation order contains "information." No commander can set out to overthrow his enemy unless he knows something about his enemy. What do we know about unemployment—what do the


Government know? I think the main thing that we know is that unemployment occurs. There is a graph at the end of the White Paper, showing how unemployment constantly recurs. What information have they about the cause of that unemployment? What steps are they taking to find out the cause? The White Paper lacks precision to that extent, in the first paragraph of their operation order. There is no reason why we should not tackle unemployment as vigorously as we tackle war. There is no reason why we should not tackle our own unemployment problems as energetically as we tackle Hitler, and why we should not seek to overthrow unemployment as effectively as we try to subdue Hitler. Hitler will be overthrown far more quickly than unemployment will be.
When the Government set out to get the information on which they are going to base the rest of their operation order, they say that they are going to be dependent, in the main, on the good will of what is known as private enterprise. Do they think that they are going to get the co-operation of private enterprise in order to bring about the end of private enterprise? Private enterprise will not be forthcoming with information in order to create public enterprise. We want to know what we mean by private enterprise. I have always been a believer in private enterprise, but I know what I am talking about when I use that term. Enterprise is always private enterprise, because it starts with the individual, but private enterprise goes wrong when it starts to exploit. That is what it has been doing. Otherwise, we should never have this recurring disease. If the Government want to convince me and other impartial critics they must produce evidence that they are starting up now, not after the war, the machine to get the results.
Now I come to the second part of the operation order—which, as I said, follows a formula—"intention." The intention is to keep the highest level of employment. I wholeheartedly agree with the Government in that, but that is not enough. No commander ever describes his intention and leaves it at that. It is quite easy to see what the objective is. If you have to take a series of trenches, or a hill, or some other dominating feature, you can see it, either on the ground or on the map. It is easy to see that you

have to overcome unemployment if you are going to avoid trouble and strife with the men returning from the Forces. Therefore, I say there is no great credit due to the Government for this intention, though it is something to know that it is their intention.

Mr. A. Bevan: I ask the hon. Member to consider the converse, which would be that the Government stated their intention not to bother about unemployment at all. That would be exactly the same as the commander stating that he did not want to win the war.

Mr. Bellenger: Well, it is something to have them saying that they do want to win the war. There are many who are not so precise. At any rate, I want to put it on record that the Government, in their intention, are quite right. Now, we come to "method." The Government rely, in general, on what they are pleased to call private enterprise and public enterprise. I have not the slightest doubt that private enterprise, or private industrial undertakings, will be able to solve part of this problem: they have solved it before. But they have never solved it completely. That is why there has been unemployment. If we adopt the methods of unrestricted private enterprise, which I gather is what my hon. Friend the Member for South Croydon (Sir H. Williams) wants, we are going to create more unemployment the more we advance with technical invention and improvement and scientific discovery. I should have thought that these are the three things that the Government would have told us they were going to do straight away, with no further ado. If they had said that, for one, would have said "Go on, I am not going to question your mandatory powers. I may not like Coalition Governments, but I like government of some sort, and I like the Government to deal with those human wants which the people who sent us here desire."
If the Government really were going to show us the weapons that they were going to use to achieve their objective, I should have thought that the first weapon would have been the monetary weapon, the keys of the castle, the Bank of England. I do not believe that, as long as the Bank of England remains under the control—as it does, in spite of the direction that it gets from the Treasury—of private industries or bankers, we shall ever solve the


monetary problem in this country. The first test of the Government's intentions is, Are they going to take complete control of the Bank of England and of the credit-making powers of the Bank?
I cannot see any reference to that in this White Paper, and, therefore, I, like many other hon. Members, am inclined to be a little sceptical about the Government's intentions. If the Government proceed to their objective, is the Civil Service—which will, presumably, have to administer, more than ever, public enterprise—the most adequate machinery we have for doing that? I think it will be disastrous, if we nationalise industry, as I believe we have to do, or have a State-owned industry, and if we attempt to operate that State-owned industry by the present Civil Service. Although they are worthy people, who have been trained in a special way in a sheltered industry, they are incapable of dealing with the day-to-day problems in business, either in private enterprise or under State control. My second point therefore is this—What method are the Government going to adopt? How are they going to tackle, with an adequate Civil Service, all these industries? I think that members of the Tory Reform Committee are already wedded to some form of ownership of the coal industry. I believe that the only way to operate the coal industry for the nation, not necessarily by profit tests of pounds, shillings and pence, is by owning it, as we now own the minerals produced from the coal mines.
The last point I wish to make on method is this. Is Parliament itself, as it is at present composed, able to deal with these problems of nationally-owned and controlled industry? I do not think it is. I do not think the training of many Members of Parliament who come to this House is sufficient to enable them to exercise the best possible control over many of these problems. I do not suggest that I, myself, have had the best possible training. I have had some business training, which enables me to look at a balance sheet and to know whether there is any profit or loss. I mean that, not in narrow terms of money. I mean profit and loss in the sense of the happiness and contentment of the community, and, whenever I have been engaged in business, I have always operated that business to what I

thought was my own satisfaction and my own happiness, and, I hope, to the satisfaction and happiness of those engaged with me. I was able to see the balance of profit and loss in an industry, but not entirely from the accountant's balance sheet. I ask whether this House as at present constituted will be able to deal with the vast problems which will face the Government if industry is owned and operated by the State in a different form and way from the way in which it has been operated by private industry up to the present time. The machinery is, as is now admitted, completely out of date for dealing with these matters and, although the Government have suggested to us that they are going to tackle it at some time, I believe that it would be far more convincing, at any rate for sceptical minds like mine, if the Government would show a little more deed than word. After all, a little action is worth reams of White Papers, and we seem to be getting many reams of these now.
I want to say, in conclusion, that I remember, in 1931, what shameful lies were uttered by members of the Tory party machine against the party to which I belong. If the party to which I belong, through its Labour Ministers, is responsible for any of this White Paper, then I am legitimately entitled to say what I am going to say. We have been advocating some of the things that are in the White Paper for many years. But in 1931, we were held up to the nation as an irresponsible party and the nation was told that the Labour Government of that day were leading us to red ruin, and that we were, by our methods, some of which are enshrined in this White Paper, destroying the people's Post Office savings.

Captain Cobb: Who said that?

Mr. Bellenger: Perhaps the hon. Gentleman will wear that cap if it fits. It certainly was not my party.

Captain Cobb: It was Philip Snowden in a broadcast.

Mr. J. J. Lawson: It was used by the Conservative Party.

Mr. Bellenger: The party to which hon. Members belong have used such misrepresentations as that, in order to achieve their position as the senior party in the Government. I am not alleging against hon. Members that they uttered the lies,


but I say that they were lies used by the electoral machinery against the Labour Party. I am a little doubtful of some of my hon. Friends opposite. I am prepared to admit that I see a little more sincerity than I had perhaps hoped for in view of previous speeches, but I am doubtful about the Conservative Party. I do not believe that they will adopt the methods to which they have put their hands in this White Paper, and that is why I believe that we have got to get back to party government, because I believe that the only people to use successfully the instrument, which must be Socialist, is the party to which I belong.

Mr. Wilfrid Roberts: The two lively speeches which have attacked the White Paper have really increased my opinion of it. It was attacked first from the extreme Socialist position, so ably put by the hon. Member for Ebbw Vale (Mr. A. Bevan), in a speech in which he whipped himself into a white fury of indignation, at the regimentation which he said was intended to be brought upon the public of this country. That was not quite in his usual line, I thought. It was also attacked by the hon. Member for South Croydon (Sir H. Williams). I rather expected that, because it seemed to me that, yesterday, when the Chancellor quoted Adam Smith, the temperature in the neighbourhood of the hon. Member for South Croydon rose very suddenly, Of course, it naturally gives a good deal of pleasure, of an old-fashioned sort, to members of the Liberal Party to hear a Chancellor of the Exchequer quoting Adam Smith. I welcomed very much what the hon. Member for Oxford (Mr. Quintin Hogg), the leader of the Tory Reformers——

Mr. Hogg: Mr. Hogg indicated dissent.

Mr. Roberts: Well, the chairman of the Tory Reformers. I welcomed what the hon. Member, and also the hon. Member for The High Peak (Mr. Molson) said, because they, and other hon. Members, have said that they have held their views for a year. That is splendid, but members of my party have held those views for a number of years longer than that, and we welcome this conversion to Liberal doctrine of members of the Conservative Party. Hon. Members of the Conservative Party, who may be future occupants of that Front Bench, seem to be taking a

very Liberal view, which we welcome wherever we find it. There is, however, an extraordinary difference in the attitude of Members of different parties to the White Paper.
The Conservative Party is really very much divided on this issue, and we shall hear more of that different approach. The hon. and gallant Member for Preston (Captain Cobb) seemed to me to have a most defeatist view of the future of this country. We have to export our population, to de-crowd this country and fill up the Empire and the Dominions instead. If that view prevailed, it would be a disaster. We have not a very large population compared with some of the other United Nations, and if we were deliberately to reduce it, and the defeatist view that there must be unemployment in the country were correct, it would be disastrous.

Captain Cobb: I did not say that there must be unemployment in this country. I said that it would be a far more effective proposition if we spread our industrial population and industries over the Empire and thereby strengthened the Empire as a whole.

Mr. Roberts: I think the hon. and gallant Member used the phrase, "de-crowding this country." Whether that is his exact view or not, it is the very common view that we are over populated and are bound to have unemployment; that it is a social ill for which there is no remedy. That is a very common view among all sections of the public; not only among the friends of the Minister of Labour in the Army, but among industrial workers in the North of England and among new factory workers. It is the very common view that there will be immense unemployment in this country after the war.
I agree with the hon. Member for Oxford that this is going to be the vital question of the future. The hon. Member for Seaham (Mr. Shinwell) and other hon. Members have asked whether this was to be the Election Address of the present Government after the war, but whatever Government there is after the war, it will he tested by the way it handles this problem. Something more is going to be tested. Perhaps the hon. Member for Ebbw Vale was a little heated about the White Paper, possibly because he feared that the suggestions contained in it might


prove of some help, at least, in increasing employment, whereas the case of the Socialist is that the capitalist system and free enterprise cannot solve the problem of unemployment. If it was found that that was wrong and that it is possible under free enterprise to maintain the high and stable level of full employment, one of the best arguments for a Socialist case would have been taken from the Labour Party. [Interruption.] I am in conflict with hon. Members above the Gangway. Our social system is at stake in the way the problems are handled, and the future of the country, also. If we make the same muddle of our employment policy as the Conservative Party did between the two wars, our future as a great country will be jeopardised.
We cannot continue, after the war, the social friction that unemployment causes. We cannot raise our own standards, maintain our war potential, remain a great country if we are to suffer from the sort of unemployment we had in the period between the two wars. We on this Bench welcome the White Paper because it contains many suggestions which members of my Party, and my Party as a whole, have pressed upon the Governent over a long period. I wish that my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) could have taken part in this Debate, because he made the question of unemployment so much his own subject, and he was so right in saying, in 1929 and before, that that was the biggest problem. What a disaster it was to this country when the Prime Minister of that time, having looked carefully at the proposals he had put forward, both during and after the Election, turned them down. There are many proposals in the White Paper that we have advocated, but we particularly welcome the approach of the White Paper to the problem and the diagnosis of what is wrong. We are not confident that the remedies proposed are adequate to the disease. The remedies that are suggested might have been adequate before the war, but it is doubtful whether, under the more difficult circumstances of the post-war world, they will be sufficient.
The White Paper proposes an Economic General Staff, which we have long wanted. I am not clear what the powers of that Economic General Staff are to be, but I hope that they will be

adequate. The White Paper recognises the fact, which the Treasury, until recently, always denied, that State spending affects the level of employment and that you can, by the management of national finances, affect the level of employment and directly affect the total employment in the country. We welcome the statement which was, I admit, rather successfully ridiculed by the hon. Member for Ebbw Vale, that the Government accept responsibility for maintaining a high level of employment. I agree with him, as I have already said, that no Government that does not accept that responsibility after the war will have a chance of surviving. Are the means proposed in the White Paper adequate to keep a predominantly free economic system working at a reasonable level of efficiency? The White Paper accepts the likelihood of unemployment, and sets about to mitigate its effects.
We must go further than that. It should be possible to use the powers of the Government—and not unreasonable powers, either—to create a situation in which a steadily rising standard of living gives a steadily increasing level of employment. The White Paper suggests that public investments can be called in to correct the fluctuations in private investments and suggests that the chief cause of slumps is a slackening in private investment. Now to correct that slackening in the construction of capital goods, we are told that we must have worked out policies of public works. That can do something, but I am not sure that it can do everything. If it is applied early enough, no doubt it will be more effective than if it is applied late but, among other suggestions that we have made, we feel that by means of an Investment Board—which is not accepted in the White Paper—private investment can be maintained at a high rate. Again, the suggestion of a double Budget, a revenue and a capital Budget, is not accepted. I am not quite sure what the Chancellor of the Exchequer implied yesterday, by his explanation that the Government would never deliberately unbalance the Budget, but it seems to me that it included turning down proposals, which have been widely discussed, as to whether the current revenue should not be separated in the Budget presentation from the capital activities of the Government.
It seems to me, again, that the approach of the White Paper is, in some respects,


altogether too tentative. Surely we must do more than hope that the industrialists will give the Government the necessary information? Surely we can require that industrialists shall give the necessary information? I do not want to dwell too long on any of these points so late in the Debate, but the White Paper essentially relies on a public works programme, on some control over the location of industry, and on variations in the rate of the social insurance contribution. Those do not seem to me to be adequate weapons to meet the analysis of unemployment as set out in the White Paper. They do not seem to me to be adequate for one reason. Some unemployment is undoubtedly caused by the technical development of industry. During the war the labour-saving devices, the increased mechanisation of industry, have been speeded up enormously. I think it is right and proper that we as a country should use scientists very much more fully than we have in the past, but the activity of science in its application to new industry is almost all directed to reducing the amount of labour used. I believe that we are to have very much more of that technical unemployment after the war.
Along with that development there has been another development, and that is the greatly increased power of trade associations, of monopolistic organisations. The hon. Member for Ebbw Vale dealt with this problem a little and argued that in order to take up the increased production which modern mechanisation and technical improvements make possible, you must raise wages. Well, that is one way you can do it, but there is another way, too. There is an older way of doing it, and that is to reduce prices. Now the effect of modern trade, monopolistic organisation, has been to maintain or raise prices, and while you could take up the added production by raising wages, you could also do it by reducing prices, and that is precisely what the modern monopoly is intended to prevent. The speed of technical development is increasing very much. You can meet the same problem by increasing leisure, but I think we have not yet reached such a level of well-being of the population as a whole that we shall want to reduce hours of work very much after the war. Let us improve our standard of living before we start thinking about reducing the number of hours that people work below the

reasonable standard which existed before the war.
I have touched on some reasons why I am a little doubtful about whether, in spite of the fact that the White Paper has diagnosed the disease, the means that it suggests are adequate to meet the situation. I hope, at least, that this Debate will have the effect on the public at large of breaking through the cynicism and doubt to which the hon. Member for Bassetlaw (Mr. Bellenger) referred. Do let us convince the people of this country that unemployment is not a natural thing, that it is a paradox, that it can be cured. If this idea grows that unemployment is incurable under democratic methods there will be a very great danger, in years to come, that the public will look at the dictatorial countries and say, "Well, they were able to cure unemployment," and there will be a movement to use those dictatorial methods, which I do not believe are, in the least, essential.

Mr. James Griffiths: We have reached the concluding stages of a Debate which has been as interesting as it has been important. It was opened with a very notable speech from the Minister of Labour. As one who has had the privilege of working with him, and hearing him long before he came to this House, I want to offer him my meed of praise for what I think was the best speech he has ever made. His was a call to resolute, sustained action to remove for ever the curse of unemployment. Almost every speech that has been made in this Debate has begun on two notes. First, it has been universally agreed on all sides of the House that in the post-war period Great Britain cannot afford unemployment. I hold the conviction that that is true not only of Great Britain but of the whole world. The other day I saw a figure quoted from a calculation made by Mr. Colin Clark, an eminent economist, that the great depression between 1930 and 1934 caused a loss in the national income of the United States of America, Germany and Great Britain alone of £22,000,000,000, almost as much as the total cost of the war to all belligerents. I believe that that great depression, with its unemployment, is one of the root causes of this catastrophe in which we are living in these terrible days.
It has also been said that we cannot in the post-war period afford the human cost


of unemployment. I have lived for the last 20 years in an atmosphere of unemployment, and I know something of the human cost. The wholesale suspension of human desires, the defeat of human hopes, the distress, the undermining of all the dignity of the human character is a cost which no nation can afford for any prolonged period if it is to sustain its greatness as a nation. I believe that in the post-war period we must solve this problem of unemployment, because I believe the people of the country have made up their minds that they are not prepared to pay for the next 20 years the price that they have paid so bitterly in the last 20 years. We were all very much moved by the incident to which the Minister of Labour referred when he and the Prime Minister saw at one of our ports a number 'of our fellow countrymen beginning that great adventure across the other side of the Channel. I hope none of us will have missed the significance of the fact that, as they left the shores of this country to face the terrible perils across the Channel, the thing uppermost in their mind was, What shall we come back to? I believe the people of the country have made up their minds that they will not put up with a reversion to pre-1939 conditions and, speaking from my own experience, and of my own people, I will lend what hand I can to make it perfectly sure that they do not have again to put up with what they experienced in the past. I believe that unless any Government, coalition, party, or any other, can find a solution of the problem the people will get rid of them. I believe the future of the whole of our democratic system depends upon whether we can find a solution of this major economic problem.
The White Paper begins with an acceptance by the Government of a responsibility, and a pledge that they will make it their first and primary aim to secure a stable level of employment. In another hour and a half we shall vote on a Motion which commits us to the acceptance of that principle and that responsibility. Having done that, the next thing we have to examine is how we propose to carry out that responsibility and to fulfil that obligation. I agree entirely that it would be criminal to make promises to these lads for the second time in our life time and break them. I think it would be equally criminal if we accepted light-heartedly

responsibilities without a real determination to fulfil them and to examine and arrive at conclusions as to how we can carry out the obligations which we accept by our vote. To-day we shall all will the end, the end being the conquering of this disease, the elimination of unemployment and the securing of full employment. We accept that as the objective of national policy. If we are to will the end, we must create the means which will achieve the end. I believe, therefore, that the best service I can render, from my own standpoint and that of the party to which I am proud to belong, is to express what I believe is our collective view about how the nation can fulfil the obligations which as from to-day we accept as a contribution to national policy. There is a statement in the White Paper which I should like to quote:
A country will not suffer from mass unemployment so long as the total demand for its goods and services is maintained at a high level.
It goes on to examine this total expenditure which it is proposed to maintain at a high level and divides it into its component parts. There are two. There is expenditure on capital goods and expenditure on consumption goods. It says that, if we are to maintain full employment, there are two things that we must do. We must maintain as high a level of capital investment as we can and as high a level of consumption purchasing power as we can. How are we going to do that? First there is the question of investment. There are some words that I want to quote in paragraph 41:
It was at one time believed that every trade depression would automatically bring its own corrective, since prices and wages would fall, the fall in prices would bring about an increase in demand, and employment would thus be restored. Experience has shown. however, that under modem conditions this process of self-recovery, if effective at all, is likely to be extremely prolonged and to he accompanied by widespread distress, particularly in a complex industrial society like our own.
There is an admission that private enterprise cannot solve this problem. The paragraph is meaningless unless it means that, because later on, in paragraph 47, it is clearly laid down that the fall in private investments has been the major cause of unemployment and that private investments and the foreign balance happen to be the elements which are most difficult to control. Therefore, if the major


cause of modern unemployment is a fall in private investment, and private investment is the most difficult to control, here is the dilemma. To be able to conquer unemployment we must first be able to control the flow and direction of investment. We are not able to do it effectively, because private capital is the most difficult to control. The old solution that I have referred to does not work now, for when a depression comes under the existing system of capitalism the old cycle is deliberately stopped because something has intervened. What is it?
This, I think, is the kernel of this aspect of the unemployment problem. We have reached the stage in which what we have is not private enterprise. We may have bits of it left but in almost all the major industries in this and other countries what we have now is not private enterprise but monopoly ownership. Monopoly ownership has certain fundamental differences from old-time private enterprise in the approach to this problem. The monopoly solution of slumps is not lower prices until demand increases and the curve turns upwards; it is not the old traditional orthodox or private enterprise one, or the one that hon. Members have been arguing for. The monopoly solution or attempted solution is restriction of production, the buying up and closing down of what they call redundant plants, with trusts, rings and permanent unemployment Therefore, the major point I want to make here is that we shall be making a great mistake if we think that what we have to deal with now is the old-fashioned cyclical unemployment. It is the permanent unemployment inseparable from the monopoly ownership of the means of production. The Minister of Labour told us that for 17 years—not 17 months—the average number of unemployed persons in this country was 1,700,000. Let me put this to the defenders of private enterprise. Do they call that cyclical unemployment? Do they call it a temporary slump? It is definitely more than that. What we are dealing with is a permanent unemployment problem which is inherent in and arises out of the existing social system, and though we can mitigate it we cannot cure it until the present social system is replaced.
For that reason I want to put the case of my party. We say on this question of capital investment that if we are to con-

trol industry and control and maintain a sufficiently high level of investment to produce a high level of employment, it is essential that the State should have sufficient authority over the economic forces to be able to produce that result. Let me put it this way and see whether it will meet with acceptance and whether it will be denied from the standpoint of the White Paper. The larger the proportion of capital investment of the country that is publicly owned, the easier it will be to find full employment. Will anybody deny that as a correct inference from the White Paper? It is admitted that private enterprise is most difficult to control; obviously because it is private, because you cannot really control a thing unless you own it. Therefore, the State will not be able to control the economic resources of the country until it has ownership of them. We say, therefore, that the larger the proportion of the investments of the country which are publicly owned and, therefore, under public control, the better will the State be able to maintain a high level of capital investment and, therefore, a high level of employment. If that is not admitted the whole promise of the public works policy goes to bits.
In view of that, may I put what appears to be a minor point, but which is not minor? It is that we view with concern and dismay the proposal of the Government to hand over national property to private owners at the end of the war. If, at the end of the war, the more national property and investment we have the easier it will be for us to control the total level of investment, then why, in the name of commonsense, do we propose to hand over £800,000,000 worth of national investment to private owners at the end of the war? We have vivid memories of what happened to the national workshops at the end of the last war. Many of these national workshops are in the areas that used to be called Distressed Areas, and if they are to be closed or sold it is not the way to full employment but the way to begin unemployment in a mass fashion again. We, as a party, say, therefore, that to maintain full employment the State must control the level, flow and direction and the amount of investment, for the larger the proportion of investment which is public, the easier it will be to plan full employment and the easier it will be for the nation to plan the full use of the re-


sources, material and human, of the nation.
We do not want to nationalise every fish-and-chip shop in the country, but we contend that all the essential services should be under the ownership and control of the nation. There is, first, the central credit machine. Who is to control that? We say that the nation ought to control it. The basic services of the nation and a whole range of industries should be under the control of the nation. I do not want to talk about what we, as a nation, could make out of the resources we have, such as coal, of the whole range of fuel and power industries, of the whole of our transport system, of the chemical industry which has developed and is so important economically to the country. These industries ought to become the property of the nation, not as a matter of theory, but because we believe we cannot bring about an economic system in which there is full employment and a rising standard of life unless the nation has control of them.
We say that that ought to be done to begin with. Then we believe it is essential that there should be national control over the flow and direction of private investments. During the period of the transition it is proposed to maintain the controls built up during the war, and those controls are to be used to ensure that investment during the transition period for civilian consumption is related to the needs of the nation. Why only in the transition period? Why should not investment at all times be related to human needs, after the end of the transition period as well?
We therefore suggest a national investment board, with power to regulate, control and direct the investments of the country, so that they minister to human needs. I do not believe we can do the job unless we have that. In the 20 years between the two wars much of the capital investment did not go into real capital assets or into the development of the resources of the country. I come from an area which has been nearly ruined by what I call "industrial bookies," by people who came along and bought up undertakings in order to dump them on to the public. A colliery might have been quite good and remunerative before these people came along and bought it up, pay-

ing £4 for every £1 share. At the end, there was no real capital put back into the industry, and the colliery is there now, in ruins. How are we to ensure that the resources of the country in the transition are used for national purposes and not' for gambling?
We believe that if we are to secure control over national investment in order to ensure full employment, there must be control by the nation of the economic powers, without which we cannot do the job. When I go back to my constituents I shall tell them that I accept this responsibility as a Member of Parliament, that I believe the Government and Parliament also accept it, because that is where the responsibility really belongs; but that I am not going to accept the responsibility unless my constituents are prepared to give a mandate that will enable us to carry out these responsibilities.
Now I come to the question of consumption. What is the central malady of unemployment? Is it not that we have reached a stage in which we have failed to create an economic system in which the mass of the people can consume the things they produce? That is fundamental. I have heard all kinds of specialists and experts referred to, but 20 years ago I heard one who is dead, and perhaps is now forgotten, speaking in London, the late J. A. Hobson. I believe that he was fundamentally right in saying that the major disease of our present economic system is that our people have not the power to consume all that they produce. There is a reference to wages and stability here. The Chancellor of the Exchequer when questioned yesterday, said that by stability was meant—and I think I am quoting him correctly—the upward climb of wages related to increased productivity. I ask the right hon. Gentleman who is to reply how we are to ensure that wages rise with the increased productivity of the workers. Has that happened in the last few years? In my industry, the highest productivity of the miners was when their wages were at the lowest. How do we propose to increase purchasing and consuming power, so that the increased productivity of the worker is used? If it is not used up, what happens?
If I went to the average miner and told him this theory that a rising standard of life—more wages, shorter hours and more holidays—must be related to increased productivity, and that what he


had to do was to increase his productivity, let me tell Parliament what he would say to me. He would say: "Suppose I do increase my productivity; have I any guarantee that I will not lose my job because of it?" Under the system of monopoly ownership, increased production would not mean that thousands of tons would be sold more cheaply than before, but that the management would cut down production or close down pits. If the miner increased his productivity, he might be asked for a cut in his wage rate. How do we propose to meet the problem of full employment by increasing consumption and purchasing power equally with the increase in productivity? Unless we can do that, we shall not solve this problem of under-consumption. We believe that it must be done, and we make two suggestions.
The first is, Why cannot we lay clown at the end of the war and of the transition period, as soon as it is possible to do so, a national minimum standard for every man, woman and child in this country, and say that below that standard they shall not fall? Why not? We can do it. Why do we not do it? Why should we not lay down a national nutrition standard when we deliberately plan production for consumption? In this country there will be more than 16,000,000 workers who want jobs; I suggest another way of looking at it—16,000,000 men and women. They are 16,000,000 workers who, at the end of the war, will be more highly skilled than our workers have ever been in the history of this country. They will have more real capacity and ability. Why cannot we say: "Here are 16,000,000 human beings, with great assets and productive capacity." Their productive capacity is winning this war, allied to the bravery of the lads over there. Why cannot we use them at the end of the war? I believe it is a job we ought to do.
There is very much work to be done to raise the standard of life. Full employment is not an objective in itself, any more than work is an end in itself. It is a means to an end, which is the raising of the standard of life of the people. We should guarantee that everybody has enough to eat and to live on, that they have decent homes, clothes, leisure, amenities and a chance to be human beings. Here is the biggest problem of Western civilisation. We are surrounded by machinery. The workers everywhere

have a feeling that they are in the power of great forces that they do not control, a machine that bosses them about at work, a combine that speaks on the telephone from hundreds of miles away, and that they cannot get democracy unless they control and direct their life properly. I believe that we can do it with the resources of our own country.
I beg hon. Members to reflect where we are going. I do not propose to ask whether, at the end of this war, we shall need to have exports or not. I believe we shall, first because exports are needed to pay for imports, and, secondly, because I do not want economic nationalism or imperial isolation. If we shut out the other products of the world, how much poorer we shall make our people. Therefore, there must be exports. The question is not where, but how. There must be an interchange of commodities between one nation and another.
I am increasingly appalled in this House to hear everybody talk as though, at the end of the war, there will be a struggle for exports and we shall have much competition. With whom are we going to compete? Look at the world to-day. Over there across the Channel Americans and British are fighting together and dying together. Are we going to compete at the end of the war with people who are now Allies in war? Are we sending out a message to the world that although we can collaborate to win a war we cannot collaborate in order to achieve the wellbeing of the people of the world? If so, do let us say so quite frankly. I say that at the end of this war we should end another war, the competition for the markets of the world, for I know what would happen. We started competing for the coal markets of the world and we beggared the coal workers of Europe, reduced them to a level of slavery everywhere. After 15 years we began to think about the possibility of regulating and organising the export trade by agreement.
We say in the White Paper that we have turned our back on the past. I hope we shall turn our back on the past in our domestic affairs, and I hope we shall likewise turn our backs on the past in international affairs. That is the problem we face. May I quote some words spoken by an American the other day:
We are engaged in a struggle that transcends the present war. This is a long fight to make a mass production economy work.


We put up with a civilisation that was commodity rich but consumption poor too long to avert the present catastrophe.
We had a Britain that was commodity rich and consumption poor, and the depressions in our internal economy and the crisis in our international life are fundamentally due to the fact that we have still a civilisation which has not devised the ways and means of building a system to enable the people of the world to enjoy the fruits of their labour. That is what we have to do if we are to solve this problem of unemployment. Whilst I welcome and will vote for the Motion, I do so realising that, having accepted the responsibility, as one Member, for eradicating, curing, abolishing unemployment, I shall go back to my people and tell them, "First hold the Government responsible for doing their job. At the same time make up your minds that you have no right to ask them to do the job, and they never will do it, until you give them the tools with which to do it." I believe that the only tools that can do this job are tools of the kind outlined in the policy which my party presents to Parliament and the nation.

The Minister of Production (Mr. Lyttelton): We have listened to a very interesting Debate. I would like to pay tribute to the speech to which we have just listened, a speech both of sincerity and eloquence. I would say at the outset that I do not think there can be any doubt in our minds that on one of the subjects which my hon. Friend has just raised, it is indubitably true that sometime during the 20's there were a very large number of unemployed in Europe, running into 14,000,000 or 15,000,000 altogether, at a time when the granaries of Canada were stuffed with grain, and when those 14,000,000 or 15,000,000 people were, as the Americans say, on the bread line, and we were unable at that time to relate these stocks of consumable commodities with those who should, and wished to, consume them. I shall deal at greater length later with the matters which my hon. Friend raised about private investment, and will try to show how far I agree with him and where I part from him.
In an earlier part of the Debate—I think it started from some interjections by my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan)—doubt was cast upon whether a democracy could pursue a con-

tinuous policy directed towards full employment. It was asked whether the White Paper was, in fact, an election manifesto; was the House of Commons going to be bound to a continuous policy on this matter? As my hon. Friend the iconoclast for South Croydon (Sir H. Williams) was at some pains to point out, I am politically fairly new, but I thought it had been a feature of our national life to pursue during long periods a continuous foreign policy. Most of our successes were gained at a time when Whig or Tory, Liberal or Unionist, Labour or Conservative were agreed upon the main lines of foreign policy, and left to the field of controversy and party politics the selvages of the problem.

Mr. Cocks (Broxstowe): Many of our failures, too.

Mr. Lyttelton: I am making this point; I would say to the hon. Member that unless you are able, in a democracy, to devise on some of these major things a continuous policy, you are subscribing to a doctrine of despair, nothing less. I think that we generally feel now that our national defence should also be the subject of a continuous policy, not necessarily how many squadrons or how many battleships we are to maintain, but that we should maintain a force sufficient to enable us to play our part as one of the guardians of peace. I suggest that what the White Paper is asking us to do is to add a third great subject to those which should be the subject of a continuous policy, that is, the cure of unemployment, or, as I prefer to say, the promotion of full employment. I see nothing undemocratic in that. I do say that as the world goes on, as circumstances change, we must adapt, enlarge and make mobile the means by which this policy is carried out, but unless we are all determined that this is the policy of the nation, and not a policy of this party or that, we shall certainly fail in our objective. I do not know and I do not think it is very profitable to discuss, whether the White Paper is new wine in an old bottle, or new wine in a new bottle, as the hon. Member for South Croydon——

Sir H. Williams: It is not wine.

Mr. Lyttelton: It seems to have gone somewhat to my hon. Friend's head today. But the real point is whether the wine is good, and whether the vintage


is going to mature to our advantage. He was at pains to show that he could present a case and that perhaps I could not. I would not necessarily dissent from that, but I would say there is another difference between us—that I have got a case and I do not think that he has.
I approach this subject with some enthusiasm, because it is one to which I have given a great deal of thought in the last 20 years. I remember in 1916 looking out of a concrete pillbox on the fields of France, and I felt a certain lightening of spirit when I saw that there were fields which one day would be tilled again, that there were houses to be rebuilt, and happiness to be brought back to those who were fighting. In the last two and a half years it has too often been my task to pare down the raw materials for civilian consumption, to be niggardly with paper for books—a particularly unpleasant task and, generally speaking, a wrong task. Too often in these past two and a half years that sort of thing has been my job, and when I see a constructive task before us I feel a lightening of spirit.
Hon. Members have asked, Does the White Paper deal with the subject of full employment? Yes, it does. I think it avoids the error of dealing with the cure of unemployment. Of course, unemployment can always be cured. Hitler cured it, as more than one hon. Member has said. He cured it by doing two things, to notice which is very important to the study of the subject. He did it by rearming the German nation, and he did it by something else—by removing their liberties and reducing their standard of life. The cure of unemployment in theory is simple. Supposing—and nothing could be more ridiculous—we conscripted the whole adult population of the British Isles into the Army after the war. There would be no unemployment, but we should have advanced not an inch towards a solution of the problem. The solution of the problem consists not only in employing people but in getting production out of their labour. Having got that production, you must correlate their consuming power with the results and fruits of their labours. That is a positive approach which is a more difficult one than palliatives such as I have mentioned.

Mr. A. Bevan: I asked the Minister of Labour and the Chancellor of the Ex-

chequer and now I ask the right hon. Gentleman: How is it proposed to give effect to the intention that wage rates should be stepped up as the index of production rises?

Mr. Lyttelton: I cannot go into the measures proposed; I am merely stating a general proposition. I know from my own experience that a great many enlightened trade unionists and their leaders are directing their efforts towards that end and I say to them sincerely that what they are doing will find a place in my heart. If ever I become an employer again I hope the response which I shall make will not be niggardly. Many hon. Members have complained that there are no legislative or administrative details in the White Paper. That is by desire. We are here trying to lay down a policy, and if the House of Commons and Parliament approve that policy we shall be encouraged to produce the administrative or legislative means to carry it out.
At this stage I would like to take up some of the points which have been put in the Debate. The hon. Member for Peckham (Mr. Silkin) and the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) focused our attention during the first day of this Debate on a matter which has not been mentioned since but which is an important point, concerning the capital expenditure of local authorities. They asked whether this capital expenditure was to be financed by a rise in the rates. If so, they said, it would have no effect on employment, because the consuming power of the ratepayer will be reduced pro tanto with the amount of capital expenditure undertaken by the local authority. We contemplate, in this field, borrowing by a local authority and to the extent that, spread over many years, the service of those loans leads to a rise in expenditure—and supposing the loan has been spent on entirely unproductive amenities—it is true to say that some rise in rates would be necessary.

Mr. Douglas: Would the right hon. Gentleman say whether the consuming power of the lender would be reduced?

Mr. Lyttelton: I do not quite follow the hon. Member.

Mr. A. Bevan: If people lend money they do not consume.

Mr. Lyttelton: I do not want to be led into a dissertation on the nature of money.

Mr. Douglas: But that is the basis of my question. Is there any reason why the consuming power of the lender should not be reduced?

Mr. A. Bevan: If a man lends he decides not to spend.

Mr. Lyttelton: I must not be drawn into theoretical arguments. There is another aspect of the matter which I am rather surprised to find was not particularly referred to in the course of the Debate, so far as I remember, and that is the subject of armaments and munition orders in peace-time. We have said, and I think rightly, that if we are to play our part as the guardians of peace we shall require to maintain substantial Armed Forces and to supply them with modern weapons. I think the supply of these weapons—and I do not want to overstate it—may make a considerable contribution, if properly planned, to a solution of the problem of structural or, as I prefer to call it, localised unemployment. Munition industries have a particular effect on the heavy industries—armour plating, gun manufacture and so forth—and it should be the object of our policy to plan the production of armaments so that it makes a contribution to the cure of unemployment.

Mr. Cove: Plan for waste.

Mr. Lyttelton: No, plan for peace. My hon. Friend the Member for North-East Leeds (Mr. Craik Henderson) expressed some doubt about Paragraph 44, which touches on this matter. I think our policy should be not to cut down expenditure on armaments—the plan having been agreed—in times of boom and equally not to cut down expenditure on armaments in times of slump on the ground that we cannot afford it. What we cannot afford is aggression by others without the means of defending ourselves, and that is my answer to the somewhat academic interruption made by the hon. Member for Aberavon (Mr. Cove). My hon. Friend the Member for Stockport (Sir A. Gridley), and my hon. Friend the Member for Bolton (Sir C. Entwistle) thought that an international agreement on primary commodities should be negotiated at once. My hon. Friend the Member for Stockport particularly referred to the disposal of surplus stocks. I do not want

to go into the matter of commodities today further than to point out that disposal of surplus stocks is an immediate practical subject which faces us now, and upon which the Board of Trade has done a great deal of work. If we wished to create unemployment there would be no surer way of doing it than to spew out surplus stocks, liquidate them and get cash for them at whatever price we could. [HON. MEMERS: "Hear, hear."] I am glad to see that that is generally agreed, but it has rather uncomfortable consequences in another part of the argument. If we are going to do that, we have got to hold back from the markets some part of the commodities the production of which has been greatly expanded during the war. If that is not a restrictive practice, I do not know what a restrictive practice is. We should be withholding from the consumer, in the interests of employment and to safeguard current consumption, a part of the stock which has been created. I do not want to make dialectical points, but there are restrictive practices—and this is an instance—which are beneficial to the worker, because they preserve his work.
I agree very much, in the main, with the remarks which fell from my hon. Friend the Member for The High Peak (Mr. Molson). He talked of these restrictive practices, in both sections of the industry, in what I thought was a very wise way. I would be the last person to complain about restrictive practices which endeavour to prevent the dilution of a skilled trade by the unskilled, or to limit even the output of the individual worker, because they are the natural protection which the worker must seek against the danger of unemployment in his industry. If we were to secure full employment, nearly all those practices would become unnecessary. But it should be realised, on the other side, that the employer has often engaged in restrictive practices for no less admirable reasons. He has tried to keep his industry from bankruptcy in order to preserve the employment of those who are working in it.
I am not going so far—it would be foolish to do so—as to say that there are no restrictive practices which are antisocial. On this matter the White Paper may seem a little bland, but it is quite definite. The Government intend to be inquisitive. It is a subject upon which


you have to proceed with very great caution, because if you introduce over-all anti-trust legislation you may destroy what used to be known as rationalisation but is now known, by some curious transmutation of public opinion, as the creation of monopolies, or semi-monopolies. There is very little difference between the two, except in words. The Government intend to be inquisitive, and are not going to be drawn into any discussion on innate virtue or original sin. Equally, the White Paper says that, if the Government discover anti-social practices, they will take the appropriate action to prevent them.
My next point relates, if not to the actual words, at any rate to the general tenor, of the speech of my hon. Friend the Member for Seaham (Mr. Shinwell). He poured, with his Parliamentary skill, a great deal of cold water upon exports. I have forgotten the actual words, but he asked, Is there a greater fallacy than this talk of exports? We all agree that nobody wants to make exports for the sake of exports. It is not impossible to conceive that we might, in these islands, have lived in a closed economy. If we had done so, the population would have been perhaps 16,000,000 or 20,000,000, and the standard of life much lower than it is today. I also thought it rather curious that an hon. Member who has shown so anxious, so continuous, and so constructive an attitude about our Mercantile Marine and our carrying trade should be pouring cold water on exports—trying to build up our Mercantile Marine and our carrying trade by destroying the principle of carrying things, either by import or by export. I agree with my hon. Friend the Member for Llanelly (Mr. J. Griffiths) that, if we approach this matter by merely trying to increase sales in an export market which, since the war, is reduced so far as manufactured foods are concerned, we shall be in conflict with our Allies, and those markets are not large enough for the type of product that we used to make.
The right hon. Baronet the Member for Antrim (Sir H. O'Neill) talked about the necessity of maintaining those markets where we had established, with British capital, great enterprises. I agree, but I do not think that the increase of exports for which we look can possibly be sustained by those markets alone. I sug-

gest that the new field in which an increase of exports must take place is, expressed shortly, the field of the Colonial Empire, of India, of China, and of Soviet Russia. Here are new export markets for many highly-industrialised products, and markets in which I do not see that it is impossible to collaborate or plan with our Allies without coming into violent conflict with those who have been doing that trade in the past and who might be jealous of any partition with newcomers, or even with old competitors. Here is the type of constructive approach which will not only help the standard of life in those countries, but afford us a market for those things which we have lost in other parts of the world, and lost permanently. If we can increase the fertility of Indian agriculture at a greater rate than the fertility of the Indian population, we shall not only have conferred a benefit on India but have created a market which will absorb some industrial products which, at this stage of her economic life, India cannot make for herself. I hope that that kind of positive approach will appeal to the House as the best way of trying to get an increase of exports.

Mr. J. Griffiths: Some day we must discuss this subject. In addition to new markets, we must consider new products. In the nineteenth century our exports were made in coal, textiles, and certain other things. Now we must look to new products.

Mr. Lyttelton: That is a point which was raised by my hon. Friend the Member for Walsall (Sir G. Schuster). He said three things. He asked: What contribution is there in the White Paper to the solution of the unemployment which existed in coal, in cotton—textiles, I think, he particularly mentioned—and in shipbuilding? The White Paper does not profess to deal with these details, but I agree with my hon. Friend that the answer to this is to put the scientific skill which has made so many substitute materials possible in war into developing the end-products of the combustion of coal. As to shipbuilding—and I apologise to the hon. Member for Seaham—increased shipbuilding can only be sustained by an increased export and import trade, and that has already been dealt with. On the subject of cotton, I think that a very great deal of modernisation of our plant and methods is necessary and that many


lessons will have to be learned from the United States in this field of industry.
I would like to touch for a moment on private or free enterprise and the public ownership aspect of this subject, and I would say what my own opinion is and repeat it quite categorically. It is that the solution of this problem lies in finding the correct mean between the organising power of the State and the free play of enterprise. The Minister of Labour and I would probably draw the line between public ownership and private ownership at a different part of the scale, but that is not a matter of principle, nor a doctrine, but a matter of practice. That is why I thought it was a pity that some hon. Members laughed yesterday when the Chancellor of the Exchequer said that the White Paper was designed to cure this problem under a system which permitted both public ownership and private enterprise, because I think that is exactly and precisely how we should approach the subject. I do not mind in the least if I disagree on a particular industry with my hon. Friends—we will look after ourselves, and they will look after themselves—but I do want to get some measure of agreement for this idea, that this is the correct synthesis, if we are to get full productivity out of our resources. The field of private enterprise is the field of a risk, in prospecting for minerals, in experimentation and in other sorts of risks.

Mr. Bellenger: Profitable risks.

Mr. Lyttelton: They must be profitable; otherwise you cannot get people to take them. If I may speak of an industry about which I know something, the mining industry, you have to lose a great deal of money before you make any, and the position of a Minister who is explaining that he has invested the taxpayers' money in a process for turning sea-water into gold, and has lost it, must always be very uncomfortable. All this experimentation should not be, and cannot be, a subject for Whitehall, but for private enterprise. Incidentally, on this subject, the hon. Member for South Croydon put his foot a little through the ice when he asked me about bulk purchases, and what happened about copper ingots. Bulk contracts made by the Government have saved over £40,000,000 during the whole course of the war. Hon. Members very often run after one of these clichés. Bulk purchase

is very advantageous, if made very cheap, and is extremely disadvantageous, if the price is very high.

Mr. A. Bevan: That is another cliché, is it not?

Mr. Lyttelton: I do not think it is really to be disputed that Parliamentary control does lead to safe, sound and beneficial forms of enterprise, but I do not think that it is suitable for the kind of enterprise which I have mentioned. I want to go into this matter of the instability of private investment. I followed with great attention the arguments of my hon. Friend, who said—and it is a very simple argument—that private capital expenditure is difficult to control. The hon. Member asked: Why not cure the whole thing by a wave of the wand and make all capital expenditure public? The reason for that is that all capital expenditure cannot be public if you are, in my submission, to get full productivity out of your national resources, for the reasons which I have just been explaining.

Mr. J. Griffiths: Would my right hon. Friend agree that, while private enterprise takes risks, it is also possible for public enterprise to exploit and initiate new processes?

Mr. Lyttelton: I do not deny that that is possible, but I say that it is not its proper function. I can only say what my point of view is, and I think the House will agree that I am putting it quite fairly. On this particular matter of the instability of private investment, I would say that I entirely agree that, if you leave the whole matter without putting some cutting edge on it, you are not going to succeed, because we are here not trying an essay in economics, but trying an essay in psychology. It is human to be prudent in almost all forms of life, and to draw in one's horns and cut down expenditure when income tends to decline, and that is the process which we are asking both private and indeed public enterprise to reverse. If you ask any ordinary board of directors, however enlightened, to extend their plant at a time when their sales are declining, you are unlikely to get results. The ordinary instinct of human prudence will come into play, and that is why I am attracted by the idea, though I do not want to overstate it, of variations in the rate of tax. That is an instrument which


has to be used with very great circumspection, and we must proceed cautiously by trial and error. I think it is unnecessary to explain it in detail, because I think that all hon. Members know what I mean. I am thinking of the same kind of thing being applied on a big scale to industry as is applied to the serving soldier or the taxpayer. Industry pays more tax during a boom, and receives a credit note which may be redeemed by the Treasury upon an entirely objective standard afterwards.

Mr. A. Bevan: Surely what the board of directors, under those circumstances, would be afraid about, is not only the declining curve of prices but what their competitors may do?

Mr. Lyttelton: The point I am trying to make is that, at the moment when we are asking every citizen in the country and every board of directors to expand their expenditure—and that should not only apply to extensions of plant, but to care and maintenance and a host of other things—it will be nice to have on the table a letter from the Treasury to say they can now cash that credit. [Interruption.]

Mr. A. Bevan: This is a Debate, and we are trying to follow what the right hon. Gentleman is saying. We are not trying to be rude to him.

Mr. Lyttelton: What I am saying is that on any assumption, a board of directors will find it easier to catch up with some arrears of maintenance, for example, or to order a new machine or extend their plant, if they have on the table at the time they are asked to make a decision a credit note from the Treasury.

Mr. Douglas: Will the right hon. Gentleman say whether the converse is not true at the time money is being accumulated by the Treasury?

Mr. Lyttelton: I do not think that I will spend any more time on that particular item. I think it is perfectly clear. I want next to deal shortly with the transitional period. This piece of jargon means the period between the end of the war with Germany, and the time when we can once more discern the contours of a peaceful world. I want to be strictly practical and I propose to deal only with that part of the transitional period that

lies between the end of the war with Germany and the end of the war with Japan, supposing they come about in that order. We are pledged—and it is no hollow pledge—to bring the full impact of this country to bear on Japan, but in fulfilling this pledge, there are certain logistic difficulties which have to be overcome. The distances are so great and the bases are so inadequate that it is impossible to employ the whole of the forces, which we have now mobilised, against Japan.
For the last six months, we have been examining this problem in great detail, the problem of what the industrial mobilisation should be to support the Armed Forces which the Services say they can bring to bear upon Japan. I cannot be precise. I can only say, in the order of magnitude, that more of the resources will be required for the war against Japan than will be released. In this period we shall have releases, and it will be the duty of the Ministry of Production and of the supply Ministries naturally to see that an absolute priority is given to production for waging war against Japan. But the other part of the problem, I think, is equally obvious. It is the duty of the munition industry and of those Ministries which I have mentioned to release for civilian production factories in places which will ease the task of my right hon. Friend the Minister of Labour on the one hand, and on the other hand will give a production which is wanted by my right hon. Friend the' President of the Board of Trade in order to supply those products which will tend to ease the strain on civilian economy, and will also make some contribution to gaining international exchange by the re-creation of our exports. We cannot be precise. We do not know when Germany will be beaten, and we do not know at what points the United Nations will have fleets in the Pacific and where the Japanese Fleet will be sunk.

Earl Winterton: My right hon. Friend talks as though Germany will be beaten before Japan, but what happens if Japan is beaten before Germany?

Mr. Lyttelton: I am not dealing with it on that assumption.

Earl Winterton: But that might easily happen.

Mr. Lyttelton: It only means that the transition period will be somewhat differ-


ent. We have to deal with the problems as they arise. It will be our task to release the capacity where labour can most easily be put to work, so that they can make the best products from the point of view of the Board of Trade. But, as I have said, we cannot be precise, because of all these uncertainties, and therefore we intend, perhaps within the next few weeks, to say to individual companies, "These are the assumptions which we have made. This is the extent to which we think capacity can be released and on what we call a pro forma basis. You can plan on that basis and do not blame us if events make this forecast rather inaccurate."
I would like, in conclusion, to say something on a subject which has been touched upon very lightly during the Debate, and that is the subject of creditor and debtor nations. That is a subject which lies at the root of all these problems. By a creditor nation I mean either a nation which has collected a large indebtedness for past services, or one which has, on the other hand, a current favourable balance of payments. We, in the whole of our industrial life, have always been a creditor nation but we shall end this war as the largest debtor nation in the world. It is impossible to carry on in the debtor position with the mentality of the creditor. The days are gone when Lady Bountiful can hand £10,000,000 to a poor Republic and say, I know we are not going to be paid back, but what does it matter, we will lend them the money again, and in the meanwhile we shall have gat rid of our inconvenient surplus." If Lady Bountiful continues in this way, she will find the bailiff's hand on her shoulder. We have to have a new mentality and put all our national resources to, work and make out of our own resources and out of the skill of our own workers—and there is none higher in the world—those things which we cannot pay for by exports. I am optimistic enough to believe that so great is the recuperative power of the modern industrial State that, with a measure of co-operation between all sections of industry, we can once again be rich and prosperous,' and perhaps we can solve the problem of employment which has so often eluded us in the past.

Captain Cobb: In the early part of his speech my right hon. Friend suggested that if, in the Division which, I under-

stand, is to take place, the Government get a fair majority, they will accept it as an authority from this House to go forward with legislation based on the White Paper. Is that the Government view? The Motion on the Paper is an anodyne.

Mr. Lyttelton: I have made it clear what the Government attitude is. If the policy outlined commends itself to Parliament we shall begin to take the measures necessary to carry out this policy, and whether administrative or legislative, they will have to be submitted, in detail, to Parliament. It is no good, for example, going into a close study of this matter of tax variation, as it is a very dangerous subject if the House has, as a whole, said that this is not the sort of experiment which in any circumstances ought to be undertaken. So hon. Members are committed to nothing. It is a general line of policy.

Mr. J. Griffiths: The right hon. Gentleman did not refer to a question which I put. We would like to have an explanation of the reference in the White Paper to the disposal of national property.

Mr. A. Bevan: Before we leave the previous question, can we clearly understand what the right hon. Gentleman means? If he means that the Motion before the House commits us to support the White Paper, then I propose to vote against that proposition. The Motion before the House is couched in innocuous terms because it does not ask the House, in fact, to express an opinion on the White Paper at all. If it is to be regarded as an expression of approval of the White Paper, let us know where we are.

Mr. Lyttelton: If the hon. Member regards the Motion as innocuous, I can see no reason why he should vote against it. If this Motion is passed, we shall regard it as a mandate to start preparing things on this line, but hon. Members are committed to nothing except the general line of policy.

Sir H. Williams: On a paint of Order, Mr. Speaker. The Motion on the Paper is really an objective, but the support of an objective is not the support of the alleged means, and if the Motion is interpreted in that way, I shall vote against the Motion.

Mr. A. Bevan: On a point of Order, Mr. Speaker. May I ask for your guid-


ance? There are certain Votes before the House, from time to time, which are Token Votes, upon which the House really expresses a decisive view, but the Motion now before the House is, in my submission, deliberately drawn up in the most innocuous terms in order to avoid asking the House to express a view on the White Paper. However, if the responsible spokesman for the Government is taking the view that a Vote for this Motion is a mandate to proceed on the lines of the White Paper, I am bound to vote against it.

Hon. Members: Let us have an answer.

Mr. Speaker: I was asked a question. I do not think the hon. Member's question was really a point of Order. It is not for me to interpret what the meaning of a Government Motion may be. It is really for hon. Members to make up their own minds on that subject.

Mr. Douglas: Is not the right hon. Gentleman's interpretation of the meaning of the Motion on the Order Paper a breach of faith?

Mr. Bellenger: What about the Motion put down by the Labour Party?

Mr. Lyttelton: We shall examine everything that has been said in the Debate. We shall study this matter in accordance with what has been said, but the House is committed to no detail on any of these things.

Mr. J. Griffiths: May I say, Mr. Speaker, that the party to which I belong, and for which I have had the privilege of speaking to-day, has considered this Motion and accepts the principle that the State accepts responsibility. We thought that all we would be voting for to-day, was the acceptance of that principle. As to how we were to implement that, is a matter which obviously the House must discuss further. If the right hon. Gentleman's interpretation had been the one that we have accepted, we would have accepted the Motion as it is on the Paper. I think we ought to leave it there, otherwise there will be a Division.

Mr. Lyttelton: I entirely agree with what my hon. Friend has said.

Sir H. Williams: Then the original statement is withdrawn?

Hon. Members: Divide.

Sir Richard Acland: I undertake to speak for less time than it would take to have a Division. I only wanted to say that the discussion which has taken place in the last few minutes expresses the view of my hon. Friends and myself about this Motion, which we regard as being question-begging almost to the point of fraudulence. We had intended to vote against it in order to express our displeasure with this kind of Motion on the Paper. We have been told, however, that many hon. Members are anxious to catch trains which leave in less than half an hour. [HON. MEMBERS: "No."] It has been put to me through the usual channels that this is so. [HON. MEMBERS: "Order."] I am quite sufficiently opposed to hon. Members opposite to be willing to embarrass them when any real purpose is to be served but the hon. Member for Eddisbury (Mr. Loverseed) expressed our view on the matter yesterday, and it was apparent to me that no other hon. Members except myself and the hon. Member for Skipton (Mr. H. Lawson) would vote against the Motion. That being so, the record contains as much as would be recorded by a Division, and the time of hon. Members has been saved.

Question put, and agreed to.

Resolved:
That this House takes note of Command Paper No. 6527 on Employment Policy and welcomes the declaration of His Majesty's Government accepting as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war.

Orders of the Day — AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL

Lord Fermoy, Mr. Henderson Stewart and Sir Dymoke White nominated Members of the Select Committee appointed to join with the Lords on the Agriculture (Miscellaneous Provisions) Bill."—[Major Sir James Edmondson.]

Orders of the Day — ADJOURNMENT

Resolved:
That this House do now adjourn."—[Mr. Beechman.]

Adjourned accordingly till Tuesday next, pursuant to the Resolution of the House this day.